Dollar on track for biggest weekly drop since April as rate cut expectations weigh

ME News message: On July 9 (UTC+8), the U.S. dollar weakened significantly this week, and it is expected to register its largest weekly drop since April. The reason is that the U.S. June employment data cooled notably, prompting the market to scale back expectations for a near-term rate hike by the Federal Reserve. The Dollar Index fell by about 0.5% this week.

Against the backdrop of a weaker dollar, the euro rose to $1.1440, up about 0.5% on the week; the pound rose to $1.3352, up about 1.1% on the week, marking the best performance in nearly three months. The yen, meanwhile, rebounded from near a 40-year low. The USD/JPY pair briefly retreated to around 161, but it still remains at elevated levels.

In Japan, foreign exchange intervention signals have continued to be released. Both finance and cabinet officials said they are closely monitoring the market and maintaining readiness to intervene. Analysts noted that the dollar’s trend has been clearly influenced by employment data and rate expectations. If subsequent economic data continues to weaken, the dollar may still face further pressure; however, whether the yen can sustain its rebound still depends on the U.S.-Japan interest rate differential and Japan’s policy actions. (Source: Jin10)