He and in falls on Wednesday at lowest level since 1986 against the dollar, keeping the exchange markets alert for any sign of intervention by the Japanese authorities to boost their currency.
The dollar was trading at 160.39 yen, a level last recorded in December 1986, while the huge difference in interest rates between both countries continued to weigh down the Japanese currency.
According to analysts, traders are testing the determination of the Ministry of Finance and the Central Bank of Japan, which spent $62 billion in late April and early May to support the currency when it surpassed 160 units.
“Unless the underlying dynamics change with the yield spread, it will continue to be punished,” said Joe Tuckey, head of currency analysis at brokerage Argentex.
How the dollar and other currencies operate
The index dollarwhich compares the US currency with a basket of six major currencies, gained 0.3%, to 105.99 units, its highest since May 1.
He euror fell 0.3% to $1.0683 after a European Central Bank official spoke of the possibility of further rate cuts this year, a markedly different stance from that of the Federal Reserve’s Michelle Bowman.
The pound sterling fell 0.3% to $1.2647 as the U.S. currency strengthened.
He yuan It was also pressured by the strength of the dollar and China appears to have shown some tolerance towards a cheaper currency by gradually weakening the midpoint of the daily fluctuation band. The yuan, which has been at the bottom of its fluctuation band for months, plummeted to a seven-month low of 7.2671 units per dollar.
Source: Ambito
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