The index dollar shows an increase of 0.5%, standing at 105.82 units, which represents a weekly advance of 1.5% against a basket of main currencies. Meanwhile, The yen hits a 34-year low of 153.34 per dollarwhile operators await signs of possible intervention by the Japanese authorities to strengthen the currency.
For their part, European stock markets show a solid rally on Friday, driven by the weakness of the euro against a firm dollar, fueling expectations that the US Federal Reserve will keep interest rates at elevated levels.
The pan-European index STOXX 600 it advances 1.1%, since the depreciation of the euro favors the internal value of exporters’ profits in dollars. London’s FTSE 100 also rose 1.3%, boosted by global mining and oil stocks.
Money market prices suggest investors expect the Fed to cut its main rate by about 45 basis points this year. This contrasts with initial expectations of cuts of around 150 basis points in early 2024.
Dollar: the data analyzed by the market
“In the short term, it will be more difficult for the Fed to cut rates than the European Central Bank,” comments Marcelo Carvalho of BNP Paribas.
The dollar index shows an increase of 0.5%, standing at 105.82 units, which represents a weekly advance of 1.5% against a basket of major currencies. Meanwhile, the yen hits a 34-year low of 153.34 per dollar, as traders wait for signs of possible intervention by Japanese authorities to strengthen the currency.
The ECB and the Bank of England are expected to begin earlier to reverse their aggressive monetary tightening efforts, which has negatively affected the euro and sterling this week. The euro is trading at a five-month low of $1.0674, while the pound falls to $1.2508, also a near five-month low.
On the other hand, Fed officials indicated Thursday that there is no urgency to reduce rates. Susan Collins, president of the Boston Fed, points out that the strength of the economy and the uneven decline in inflation advise against a short-term push to lower rates.
The yield on long-term US Treasury bonds has risen 16 basis points this week, trading at 4.54%, having increased from less than 3.9% in January.
Elsewhere, MSCI’s broadest index of Asia-Pacific shares excluding Japan is down 1%. Meanwhile, gold hits a record high of $2,397.1, with a weekly advance of 2.9%, and oil rises 1% after Iran announces possible retaliation for an alleged Israeli airstrike against its embassy in Syria.
Source: Ambito
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