Suspected Japanese currency intervention and Fed rate hold at 3.50%-3.75% weigh on the dollar, lifting the euro to its highest since mid-August.
The euro surged to a six-week high against the dollar on Thursday, with EUR/USD climbing as traders reacted to suspected Japanese intervention in currency markets and a Federal Reserve decision to hold interest rates steady at 3.50%-3.75%. The greenback remained under pressure amid a flurry of U.S. economic data releases, fueling speculation about future monetary policy moves.
Prior to the Fed’s announcement, the dollar had already weakened against major peers, with traders pricing in a cautious stance from the central bank. The euro’s rally extended gains from earlier in the week, supported by relative stability in European economic indicators compared to U.S. data surprises.
Markets showed limited immediate reaction to the Fed’s decision, focusing instead on the broader dollar sell-off driven by external factors, including potential Japanese yen support operations.