The currency of the world’s leading power rose 0.7% against the Japanese currency to settle at 123.63 yen after hitting a one-week high of 123.66. It is worth remembering that on March 28 it had shot up to 125,105 yen, the highest level since August 2015.
The euro, on the other hand, was affected by concerns about the outcome of the French elections. It was down 0.6% at $1.0901.
President Emmanuel Macron is still ahead in opinion polls, but his far-right eurosceptic rival Marine Le Pen has been closing the gap, and a poll on Monday put the victory within the margin of error, baffling investors. ahead of the first round of the French presidential election on Sunday.
Meanwhile, the Australian dollar was up 0.4% at $0.77521, while the New Zealand dollar was up 0.2% at $0.6937. Both currencies are closely linked to the performance of raw materials.
Fed Governor Lael Brainard, usually one of the Fed’s more dovish policy officials, said Tuesday that she expects methodical interest rate hikes and rapid balance sheet reductions. of the monetary authority to bring US monetary policy to a “more neutral stance” by the end of this year, with further adjustments as necessary.
Kansas City Fed President Esther George, a voting member of the Federal Open Market Committee, also supported a quick sell-off of the Fed’s balance sheet in comments Tuesday, saying “50 basis points (of rate hike) will be a option that we will have to consider.
“The dollar’s moves were primarily a function of Brainard’s aggressive comments today. She was very clear on two things,” said Erik Nelson, macro strategist at Wells Fargo Securities in New York.
“First, the Fed wants to reduce the balance sheet quite aggressively and much faster than the last cycle. And second, the Fed is really open to a 50 basis point increase and could do so at any time during the next few meetings. This is the kind of language you don’t see from many Fed officials, especially Brainard,” Nelson added.
Source: Ambito
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