The dollar index fell below 98 on Friday, its lowest level since late February, after recording its biggest one-day drop since mid-March in the previous session. The decline was driven largely by a sharp rally in the yen, amid suspected intervention by Japanese authorities. Reports suggested that US officials were notified in advance, consistent with the G7 practice of coordinating major currency actions.
On the economic front, new data showed that US manufacturing activity in April held at a four-year high, supported by robust growth in new orders, further lengthening of supplier delivery times, and a sharp pickup in price pressures against the backdrop of the ongoing Iran conflict.
In terms of monetary policy, Cleveland Fed President Beth Hammack and Minneapolis Fed President Neel Kashkari both warned that the Fed’s latest policy statement may have been too dovish, highlighting the potential challenges incoming Fed Chair Kevin Warsh could face if he seeks to lower interest rates.
