Dollar Tumbles On Broad Long Liquidation

The greenback tumbled against the majority of its peers on Wednesday as U.S. Treasury yields fell from their recent highs, prompting investors to liquidate their recent long dollar positions.

Earlier in Asia, despite a brief rebound to 1.2864 in Asian morning, the single currency dropped to a session low at 1.2838 ahead of European open. However, price found good buying interest there and rallied in European morning on dollar's broad-based weakness, euro climbed further to an intra-day high at 1.2977 ahead of New York open as a decline in U.S. bond yields prompted investors to sell the buck. Later, price pared intra-day gains and retreated to 1.2919 in New York afternoon before trading narrowly.

Versus the Japanese yen, although the greenback dropped from 102.53 to 102.02 in Asian morning, price recovered to 102.48 ahead of European open. However, price fell sharply to 101.53 in European morning on active cross-buying of yen before tumbling further to an intra-day low at 100.71 on dollar's weakness. Later, price pared intra-day losses and recovered to 101.18 in New York afternoon.

The British pound rebounded to 1.5038 in Asian morning before dropping in tandem with euro to session low at 1.5008 ahead of European open. Despite rebound to 1.5071 in European morning, cable fell briefly but sharply to 1.5025 after the release of much weaker-than-expected CBI distributive trades. However, dollar's broad-based weakness pushed the pair higher and cable rallied to an intra-day high at 1.5147 in New York morning before trading sideways.

U.K. CBI distributive trades in May came out at -11, worse than the expectation of 3.

In other news, BOJ senior official said 'many market participants asked BOJ to buy JGBs more often in smaller amounts; many market participants said BOJ should avoid buying JGBs on JGB auction days; hope to announce JGB purchase schedule for June sometime late on Thursday.'

On the data front, German unemployment rate in May remains at 6.9%, same as the forecast. German CPI in May came in at 0.4% m/m n 1.5% y/y, vs the forecast of 0.2% n 1.3% respectively.

Data to be released on Thursday:

Australia building approvals, private capex, Swiss GDP, Italy PPI, EU economic sentiment, business climate, consumer confidence, Canada PPI, U.S. GDP annualised, PCE, jobless claims and pending home sales.