The dollar index, which gauges the greenback’s performance against a basket of six currencies, rose to its highest level since November.
On this day, the euro, the pound sterling and the yen They are trading at multi-month lows. The japanese currency is on the verge of surpassing the psychological level of 150 units per dollar. This scenario is influenced by the rise in US Treasury bond yields, which continues to strengthen to the dollar.
Currently, the euro remains stable around 1.0476 dollars, its lowest level since early December 2022, after suffering a drop of almost 1% the previous day. This decline followed comments from officials at the Federal Reservewho indicated that monetary policy should remain restrictive for some time”.
The combination of solid economic data and a agreement to avoid a partial shutdown of the United States Government has led to Treasury yields hitting a 16-year high, standing at 4.706% this Tuesday. This rise in yields further drives the dollar higher.
Samy Chaar, chief economist at Lombard Odier, points out that there are two powerful factors supporting the dollar at this time: the real rate differential in favor of the United States and the good performance of the US economy. Real interest ratess, taking into account inflation, are decreasing more rapidly in the United States than in Europe.
On the other handthe pound sterling has fallen to its lowest level since March, declining 0.26% and reaching $1.20565. Traders are especially focused on the Japanese yen, which remains stable at 149.89 units per dollar, close to its weakest level in almost a year and about to reach 150 units per dollar. This last level could motivate interventions by the Japanese authorities to stabilize the currency.
Japanese Finance Minister Shunichi Suzuki stated today that they are closely monitoring the currency market and are prepared to respond to the situation. However, any decisionabout intervention in the market Currency trading will depend on volatility, not specific yen levels.
The dollar indexwhich assesses the performance of the greenback against a basket of six currencies, has risen 0.13% to 107.16, marking its highest level since November.
This week, the main economic data in the United States focuses on the labor market. ‘JOLTS Job Offers’ and ‘Non-Farm Payrolls’ May Act as Catalysts Driving US Yields and Dollar Higher Yes, they surprise positively, according to Carol Kong, economist and currency strategist at the Commonwealth Bank of Australia.
Source: Ambito
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