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The super dollar flies and reaches five-month highs: what’s behind it

The super dollar flies and reaches five-month highs: what’s behind it

Meanwhile, the yen continues to weaken, reaching its lowest level since 1990. This situation keeps traders on alert for possible interventions by the Japanese authorities by buying yen.

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He dollar globally is in a strong position this Tuesday, hitting five-month highs against the pound sterling and the euro. This increase comes after a US retail sales report that exceeds expectations, Boosting Treasury Yields and stoking fears of possible intervention by Tokyo. Meanwhile, the yen continues to weaken, reaching its lowest level since 1990.

The report released yesterday reveals a 0.7% increase in US retail sales last month, beating the 0.3% forecast of economists polled by Reuters. This reinforces the perception that the Federal Reserve is in no rush to reduce interest rates this year.

Kenneth Broux of Société Générale comments that “the US economy continues to grow very solidly, above the long-term trend, which supports the rise in bond yields and discourages the Fed from cutting rates.” .

Dollar: what data the market analyzes

Investors are looking ahead to Fed Chair Jerome Powell’s comments scheduled for later in the day, his first remarks since last week’s U.S. inflation data came in more bullish than expected.

Meanwhile, the euro experiences a slight rise to $1.0626, but remains hovering around its lowest levels since November 2, affected by the European Central Bank’s announcement of a possible rate reduction in June.

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The pound also shows a slight advance to $1.2449, after hitting a five-month low of $1.2409. Traders are digesting data indicating weak growth in British basic wages, although they remain strong by historical standards.

These movements contribute to the increase in the dollar index by 0.04%, reaching 106.23 units, after reaching its highest level since November 2.

On the other hand, the yen is around 154.64 units per dollar, its weakest level in 34 years, approaching what analysts consider a new resistance level at 155. This situation keeps operators on alert in the face of possible interventions by the Japanese authorities by buying yen.

Source: Ambito

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