The dollar retreats from highs of 10 months this Fridayalthough it is still on track for its biggest quarterly profit in a year, providing to the yen some respite while the bets on a possible Japanese intervention intensify.
The dollar index, which compares the U.S. currency to a basket of six major currencies, is losing 0.4%, standing at 105.75 units. However, he is heading to finish the quarter with an increase of 2.8%along with an 11th consecutive weekly rally, marking the longest streak in nine years.
U.S. Treasury yields are falling from multi-year highs, a factor that, coupled with a 27% rise in the price of oil this quarter, helps the greenback become the leader of the year against almost all major currencies.
City Index’s Fiona Cincotta mentioned: ‘The US economy has resisted, the labor market has improved, inflation has accelerated and, obviously, the price of oil has risen. There are many things at stake.”
“He further added: ‘RWe really don’t expect to see any interest rate cuts for quite some time, until the end of 2024. Additionally, the Fed may not want to take a less hawkish tone, because they don’t want to undo the work they’ve done too soon.'”
Yen: would the Japanese Government intervene?
Despite achieving some respite, the pressure on the yen remains, since it is trading close to 150 units per dollar, a level that many consider as a possible trigger for intervention by the authorities. The Japanese currency is losing 0.25% on the day, standing at 148.925 units.
On the other hand, the euro is advancing for the second day in a row. In its latest trading, it shows an improvement of 0.4%, reaching $1.0608 and moving away from its multi-month low this week, which was $1.0488.
The pound sterling is gaining 0.2%, reaching $1.2236, after having hit its lowest since March 17 this week. This followed data that showed on Friday that The UK’s economic performance since the start of the COVID-19 pandemic has been better than previously thought.
Source: Ambito
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