The US currency fell amid an unusually strong yen and traders’ expectations of a loosening of US monetary policy.
He global dollar fell on Wednesday amid increasingly direct signals from the United States Federal Reserve (Fed) regarding an early reduction of the interest ratesand the possibility that the Bank of Japan intervene once again and in to prevent the national currency from remaining at historic lows.
He dollar index —which compares the performance of the greenback with a basket of six internationally relevant currencies— fell 0.43% to 103.76 units, dragged down by several factors. On the one hand, the fact that the Fed is “getting closer” to feeling comfortable to start cutting interest rates, according to the president of the monetary authority of New York, John Williams.
In this regard, and although there is a lack of data confirming the trend of inflation slowdown before the July meeting, he noted that there have already been “a few good months”, in line with the statements of Jerome Powell at the beginning of the week that the second quarter readings “add some confidence.” This led to the dollar will fall in the opposite direction to operators’ expectations.
The dollar, against the yen, the euro and the pound
But the actions of the Bank of Japan has also had an impact on the US currency. In fact, the and in rose sharply on Wednesday, in what traders suspected could be the result of another intervention by Japanese authorities to shore up the currency, which was trading at multi-decade lows.
In this way, the dollar fell 0.32% against the Japanese currency to 156.25 yen, a move that traders attributed to Japan’s intervention on the exchange rate, even though the Ministry of Finance Japan did not respond to requests for comment.
Meanwhile, the euro rose 0.37% to $1.0937, awaiting Thursday’s meeting of the European Central Bank (ECB), where the institution is expected to leave interest rates unchanged.
The pound sterling appreciated 0.32% to $1.3006 and hit a one-year high against the dollar at $1.3044 after it was announced that the inflation British currency rose slightly more than expected, reducing the chances of the Bank of England cut rates at their next meeting.
Source: Ambito
