The US dollar fell sharply on Thursday, with the dollar index dropping to a six-week low and ending the session down 0.99%. The move came as fresh US economic data showed second-quarter GDP growth was weaker than expected, adding pressure to the greenback.
At the same time, the Japanese yen surged, and the speed of that move fueled market talk of possible intervention by Japanese authorities. That combination of a softer dollar and a rapidly strengthening yen became the main story in currency markets.
The weaker US growth reading appeared to hurt confidence in the dollar, which had already been under pressure as traders digested the latest economic signals. A lower-than-expected GDP result can shift sentiment quickly in foreign exchange markets, especially when it arrives alongside major moves in another key currency.
The yen’s rally stood out because it was strong enough to trigger speculation that Japan may have stepped in to support its currency. While the full picture was still developing, Thursday’s trading made clear that both softer US data and suspected Japanese intervention were central to the day’s sharp moves in the dollar and yen.
