He dollar was heading toward a second week of big gains on Friday, in which not even a rate hike in Japan could stop it, and in which a surprise cut in Switzerland highlighted the gap between the Federal Reserve and its peers. global interest rates.
The dollar was headed for its second-biggest weekly gain against a basket of currencies, while Rate-sensitive assets such as gold and stocks hit all-time highs.
Expectations of monetary policy easing in China have also put pressure on its currency, for example, which fell sharply in the session in mainland markets, spooking equity investors and prompting state banks to intervene.
The yuan traded at 7.2303 units per dollar, while in offshore markets the dollar rose 0.7% to 7.2712 yuan, its biggest daily rise against the yuan in a year.
The Bank of Japan announced a historic shift away from negative short-term rates and long-term profitability limits, but it was so well telegraphed that the yen fell on the news and came within a breath of multi-decade lows of 151. .51 units per dollar.
The United States Federal Reserve this week maintained its interest rate between 5.25% and 5.5% and maintained its forecasts of three cuts by the end of the year. But he also said he won’t start moving until he has more confidence that inflation is falling sustainably toward 2%.
The dollar/yen has risen 1.6% this week and is approaching the levels that caused Japanese intervention in 2022, which has nervous investors, who are also looking for other currencies to buy and pocket the “carry”, or difference between interest rates.
The euro/yen this week reached its highest since 2008 at 165.37 yen. With the dollar rising, the euro hit three-week lows, trading down 0.4% at $1.0815.
Sterling fell 0.6% to a one-month low of $1.258, following Thursday’s 1% drop after the Bank of England left interest rates unchanged, this time backed by both committee members. hardliners who had previously voted in favor of an increase.
Bitcoin was on the verge of posting its biggest weekly drop since January as cryptocurrency markets have taken a step back following this week’s strong rally, although it will continue trading through Sunday. Bitcoin fell 0.2% on the day, to $65,300.
Source: Ambito
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