The U.S. currency rose to its highest level since late July against the yen, while pushing the euro to a more than three-month low.
He global dollar continues to rise and, in return, putting pressure on other currencies downwards, in a context in which safe assets are strongly appreciated – like, for example, also gold – and in which the economic situation USA pushes its value upwards in the run-up to the defining days of November.
He dollar rose 1.1% compared to yen to 152.82 units, its highest level since July 31, the day the Bank of Japan It raised interest rates to their highest level in 2007 and, incidentally, gave a strong shock to global markets. “So far this year, the yen has been the most sensitive currency to movements in US yields, so that is driving the dollar higher against the yen, and then there is the change in government and expectations that the Bank of Japan will remain cautious and that they may not even increase in December,” he told Reuters. Roberto Cobo, strategy manager FX G10 in BBVA.
Japan will hold general elections on October 27, and recent opinion polls indicated that the ruler Liberal Democratic Party could lose its majority with its coalition partner Komeito. This risk of a minority coalition government has raised the prospect that political instability will complicate the Bank of Japan’s efforts to reduce reliance on monetary stimulus.
“But the main driver of the Japanese yen remains the US yield curve“Cobo insisted, noting that longer-term U.S. government bond yields had risen as markets reduced expectations of substantial rate cuts by the U.S. Federal Reserve (Fed) this year.
The yield on the benchmark 10-year bond hit 4.24% on Wednesday, its highest level since late July. Thanks to better-than-expected economic data, markets now see a 91% chance of a moderate quarter-basis-point cut in November by the Fed. A month earlier, investors viewed a 25-point move as certain. basics and some possibility of a reduction of 50 basis points.
Regarding the expectations of the operators, the possibility that the former Republican president donald trump win the US presidential election next month has further boosted the dollar across the board. On the other hand, the currency pushed the euro to a more than three-month low, following a 0.2% drop, further underpinned by recent weak economic data and markets expecting more rate cuts from the European Central Bank (ECB) in the coming months.
The dollar returned to the positive path in Uruguay
In Uruguay, meanwhile, the dollar rose 0.16% compared to Monday and closed at 41,514 pesos, according to the price of the Central Bank (BCU), cutting three consecutive days downwards and remaining stable in the middle zone of the 41 peso range.
Despite this advance, in line with what happened internationally, the US currency failed to recover the positive sign in the accumulated monthly and fell 0.30% so far in October, while the appreciation of the dollar It reached 6.39% compared to the end of 2023.
Source: Ambito
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