The dollar index, which evaluates the performance of the US currency against six currencies, registered a slight decrease of 0.1%, standing at 104.22.
This Tuesday, the dollar continues its rise, trading above 150 yen for the sixth consecutive dayas investors express growing uncertainty about the imminent end of Japan’s ultra-low rate era.
The recession that the country is going through contributes to maintaining expectations in this scenario, while the yuan is not affected by a cut in China’s reference interest rate.
Japanese Finance Minister Shunichi Suzuki reiterated his attention to currency movements with a “high sense of urgency,” highlighting that the yen exchange rate is determined by various factors. The yen loses 7% of its value in 2024 alone, surpassing the mark of 150 units per dollar on February 13. Previously, the 150 units were considered a critical line that could trigger intervention by the Bank of Japan and the Ministry of Finance, as happened at the end of 2022.
Dollar vs. other currencies
The dollar shows a 0.1% increase to 150.305 yen, supported by fading expectations of an imminent rate cut by the US Federal Reserve, after last week’s surprising data on producer prices and to the consumer in the United States.
The Japanese economy, which unexpectedly entered recession in the final quarter of last year, has led investors to rethink the possibility of an early exit from zero rates by the Bank of Japan.
On the other hand, China reduced its reference rate for mortgages as part of efforts to stimulate credit demand and revitalize the real estate market. Despite these moves, the yuan remained near a three-month low as investors believe more policy measures are needed to strengthen fragile confidence.
In offshore markets, the yuan barely changed, standing at 7.2065 units per dollar. Meanwhile, the euro was steady at $1.0787, and the pound rose 0.1% to $1.2604.
The dollar index, which evaluates the performance of the US currency against six currencies, registered a slight decrease of 0.1%, standing at 104.22.
Source: Ambito
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