US Dollar Index continues to slide: lowest close since September

The greenback fell across the board and particularly against European currencies. During the American session, it even dropped versus the yen, making a reversal from monthly highs. The US Dollar index was holding below 95.40 near the end of the session, headed toward the lowest close since late September. 

No bounce

The rebound of the index was short-lived and after reaching 95.70 turned to the downside again, despite US economic data. GDP increased at an annual rate of 1.4% during the first quarter, according to the third" estimate, above the 1.2% of market consensus. 

US: Real GDP increased at an annual rate of 1.4% in the first quarter of 2017

The greenback failed also to benefit from rising US bond yields with the 10-year yield at the highest in 6 weeks. The spread between US and European yields narrowed further pushing EUR/USD and GBP/USD further to the upside. 

Volatility rises, dollar keeps falling 

The dollar was up against yen, but the Japanese currency strengthened after a reversal in equity prices in Wall Street. The Dow Jones reached the lowest in two weeks before trimming losses. The fear index, the VIX (a gauge of volatility) jumped today almost 40%. The DXY bottomed at 95.23 and was holding near the lows. 

The change in the tone from several central banks fueled volatility and the renewed dollar weakens. Since Tuesday, the DXY lost almost 2%, taking to 6.7% the year-to-date decline.