U.S. Dollar Slumps as Data Continues to Show Slowdown; Yen Rises

By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) – The dollar slid on Thursday in choppy trading, as a slew of data continued to show that the U.S. economy was slowing down in the wake of multiple hefty interest rate hikes from the Federal Reserve, with the market anticipating a pause in tightening this year.

“The market is just one-way right now: short dollars and long bonds. It’s going to take some time to change that direction because the current data flow is not favorable to the Fed’s stance that rates are going to stay higher for longer,” said Mazen Issa, senior FX strategist at TD Securities in New York.

“That may be what ends up happening. But it’s harder for the Fed’s message to resonate for markets after so much tightening has been done and also what the data flow has shown.”

The yen, on the other hand, rallied due in part to expectations that the Bank of Japan (BOJ) will eventually shift away from…

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