FOREX Dollar crumbles vs yen, in line with Treasury yields, as U.S. growth falls in Q2
- Dollar posts largest daily fall vs yen since March 2020
- U.S. GDP contracts by 0.9% in Q2
- Fed funds futures pull back rate hike expectations
NEW YORK, July 28 (Reuters) – The dollar dropped to a six-week low against the yen on Thursday, tracking the decline in Treasury yields, after data showed the U.S. economy contracted again in the second quarter, fueling speculation that the Federal Reserve will not raise rates as aggressively as previously expected.
The greenback posted its largest daily percentage fall against the yen since mid-March 2020. In the U.S. Treasury market, two-year yields, which reflect interest rate expectations, fell to a three-week low. From its peak on Wednesday, the two-year yield has declined by 24 basis points.
Data showed on Thursday that gross domestic product fell at a 0.9% annualized rate in the second quarter. Consumer spending grew at its slowest pace in two years and business spending contracted, raising…
