The remarks made by the Dallas Federal Reserve President also triggered a selling response in the dollar.
A little earlier, the foreign exchange market saw a reaction of dollar selling, causing the USD/JPY pair to drop to exactly 149 yen, while the EUR/USD was bought back near 1.0550 dollars. Around 22:00 Japan time, comments from Logan Dallas, the Federal Reserve Bank of Dallas President, were reported. He mentioned, “Rising yields may reduce the need for rate hikes,” which seemed to elicit a sensitive response.
However, this type of commentary has been seen before and is not particularly unusual. It’s worth noting that it’s Columbus Day, a bank holiday, so there are fewer participants in the NY foreign exchange market. It’s possible that the market’s sensitivity to such comments was amplified due to the thin trading conditions.