Dollar Posts Biggest Drop in Two Months on Fed and Yuan Rally
- Greenback falls below 116 yen for first time since Dec. 14
- ‘Over-extended long dollar’ wagers add to selling: Macquarie
What's Driving the Dollar Lower?
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The greenback fell by the most since Donald Trump won the U.S. presidential election as the Federal Reserve’s meeting minutes showed uncertainty over how his policies would impact the pace of interest-rate increases, while a yuan rally exacerbated the dollar selling.
Investors trimmed long-dollar positions amid signs the trade has gotten increasingly crowded, sending the greenback falling below 116 yen for the first time since Dec. 14. The offshore yuan’s record two-day jump versus the dollar as liquidity tightened in Hong Kong also spurred investors to sell the greenback against other Asian currencies, according to Masakatsu Fukaya, a Tokyo-based emerging-markets trader at Mizuho Bank Ltd.