Super dollar rose, but moderated rally after Japan’s first currency intervention since 1998

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North American traders cautiously pushed the dollar higher against the yen following the Japanese authorities’ moves, but for now, few are challenging the intervention.

On a very busy day for the markets, the pound sterling parried the small gain made after the Bank of England raised rates by 50 basis points. The British currency fell 0.2% to $1.1251, close to a fresh 37-year low hit earlier at $1.1213.

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The euro It was barely changed by $0.98, recovering from a new 20-year low hit earlier in the global session.

“The market is nervous”said Steven Englander, head of North American foreign exchange trading at Standard Chartered in New York.

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The euro, the Australian dollar and the British pound they also plummeted against the Japanese currency.

The yen strengthened with force on Thursday, after the Japanese authorities intervened in the foreign exchange market for the first time since 1998 to shore up the battered currency. The dollar fell as low as 140.31 yen and later fell 1.2% to 142.37 yen in highly volatile trading. The euro, the Australian dollar and the British pound also fell against the Japanese currency.

It was Japan’s first intervention in the foreign exchange market to prop up the yen since 1998 and came in the wake of the central bank’s decision to keep interest rates ultra-low, sending the currency down. “What Japan is doing is sending a signal that raising the dollar/yen is not a free ride,” he said. Jane Foleyhead of foreign exchange strategy at Rabobank in dialogue with Reuters.

However, he added: “Given that the Bank of Japan has just implemented a very loose monetary policy, just after the Federal Reserve has adopted a more aggressive stance, I think the fundamentals will push the dollar/yen higher.”

Source: Ambito

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