The dollar had been punished in the world, but it began to regain strength in the face of a possible new rate hike next week by the Federal Reserve (Fed).
He dollar is strengthened in the world this Friday, July 21, especially with respect to the japanese yenbecause the money markets estimate at 96% the possibility that the Federal Reserve will raise interest rates by 25 basis points next week. And, on the other hand, after the Bank of Japan (BoJ) leaned to keep its policy of control of debt yields unchanged next week, before a series of meetings of central banks that include the United States and Europe.
He dollar index, which measures the performance of the greenback against a basket of six currencies -including the yen-, rose 0.33% to 101.10 units. Thus, the index is on track to register a weekly rise of 1.1%, the highest in two months.
The dollar is on its way best weekly percentage gain against the Japanese currency since October, and stands at 2.22%.
dollar vs. yen: that’s how it’s going
In this way, the dollar trade with up 1.26% to 141.83 yen, after reaching 141.95 yen, the highest level since July 10. The US currency is trading just below the 145.07 yen level reached on June 30, a high since November 10.
BoJ officials prefer to examine more data to ensure wages and inflation continue to rise before changing policy, five sources familiar with the matter said in a Reuters report. The report added that there is no consensus within the central bank and that the decision could still be very close.
With inflation exceeding the BoJ’s target for over a year, markets have been seething with speculation that the central bank could modify the control of the yield curve as early as the meeting of July 27 and 28.
“All expectations are that they will retain control of the yield curve as is and with no change in rates, but perhaps with a small improvement in their inflation outlook,” said Edward Moya, a senior market analyst at OANDA in New York. York. However, he explains that “the chances that we could have a surprise should remain on the table.”
“The BOJ is potentially going to be a major market-moving event as time is running out for the BOJ to actually put in place a policy change,” he said. And it is that Data issued on Friday showed that core inflation in Japan accelerated to 3.3%, matching the average market forecast but above the BoJ’s 2% target.
Source: Ambito
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