A broad-based US dollar selloff defined a session devoid of major data releases, driven by a surge in precious metals that propelled GBP/USD up 1.10% and EUR/USD 0.93% higher.
USD Weakness Intensifies as Gold Surges Past 4700
The US dollar weakened against all major counterparts in a move that appeared disconnected from fundamental catalysts. The price action was instead correlated with a powerful rally in precious metals, with Gold climbing 5.61% to 4700.61 and Silver rocketing 9.97% to 75.00. This risk-off impulse saw capital exit the dollar despite its positive real yield of +0.45% (3.75% Fed Funds Rate vs 3.30% CPI). The move likely triggered a flush of speculative positioning, which COT data shows was net long USD (5,170 contracts) entering the period.
The Canadian dollar also benefited, with USD/CAD falling 0.63% to 1.3758. The move against crowded net short CAD positioning (-78,272 contracts) suggests a significant short squeeze was a contributing factor. With a positive real policy rate of +0.45%, the CAD found support as the broader USD unwind gathered momentum.
Yen Shorts Squeezed as USD/JPY Breaks 159.00
The Japanese yen was a primary beneficiary of the USD downturn, with USD/JPY falling 0.62% to 158.8485. This move appears driven by an unwind of extremely crowded short JPY positions, reported at a net -83,208 contracts. The yen's negative real yield of -1.10% (1.00% BoJ rate vs 2.10% CPI) remains a significant structural headwind, limiting the scope for a sustained rally without a shift in central bank policy.
However, the yen's gains were concentrated entirely against the dollar. JPY weakened against European currencies, with EUR/JPY rising 0.31% and GBP/JPY adding 0.48%. This cross-market price action underscores that the session's primary driver was a distinct USD-negative flow rather than a bout of standalone JPY strength.
What to Watch Next
- US CPI (Apr): The key release this week will determine if the Fed's inflation fight allows for a dovish pivot, which could extend the current USD selloff.
- BoJ Meeting Minutes: Scrutiny will be intense for any language suggesting discomfort with yen weakness, which could fuel further short-covering in JPY pairs.
- EUR/USD Technical Level: The pair is now approaching the psychologically significant 1.1800 handle; a clean break could open the door to further upside.
The key risk is whether this USD weakness is a temporary positioning adjustment in a quiet corridor or the beginning of a new trend, with upcoming US inflation data poised to be the decisive factor.
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This briefing covers economic releases from April 13, 2026. Published automatically at 07:00 UTC.
