The US dollar is getting poleaxed, touching fresh multi-year lows in Asia.
Here’s the weekly chart, revealing the US dollar index, or DXY, has now fallen more than 12% from the levels seen this year.
Already under pressure due to growing scepticism that the US Federal Reserve will raise rates again this year, driven by soft US inflationary pressures and doubts about the Trump administration’s ability to push through infrastructure and taxation reforms, the latest bout of selling appears to have been as a result of a sharp strengthening in the Chinese yuan earlier in the session.
The USD/CNY briefly fell to as low as 6.4476, leaving the yuan at the strongest level since December 2015.
While the dollar has recovered fractionally, the yuan’s surge helped to lift currencies such as the euro, Australian dollar and Canadian dollar to fresh multi-year highs.
The buck is getting banged-up, and there’s little sign of an imminent reversal.
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