Latest News

Resilient U.S. dollar soars to 24-year high vs yen, 37-year peak vs sterling


Resilient U.S. dollar soars to 24-year high vs yen, 37-year peak vs sterling By Reuters

Breaking News


Economy 13 minutes ago (Sep 07, 2022 20:36)

© Reuters. Pedestrians are reflected on a board displaying the Japanese yen exchange rate against the U.S. dollar and euro, outside a brokerage in Tokyo, Japan September 6, 2022. REUTERS/Kim Kyung-Hoon

By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) -The dollar surged to a 24-year peak against the yen and a 37-year high versus sterling on Wednesday, as Japan’s dovish monetary policy and Europe’s economic problems contrasted with a relatively stronger U.S. economy and a hawkish Federal Reserve determined to bring down inflation to its 2% inflation target.

The U.S. currency soared as high as 144.99 yen, hitting the level for the first time since August 1998. It is now within a large leap of its 1998 high of 147.43. The dollar was last up 0.9% at 144.09 yen.

Against sterling, the greenback hit $1.1407, the lowest since 1985 and last down 0.1% at $1.1509.

“Increasingly, it is becoming a growth story and really a crisis story. We have China continuing to have a COVID-zero policy, and if anything continuing to double down, locking down more cities,” said Erik Nelson, macro strategist, at Wells Fargo (NYSE:WFC) in New York City.

“Europe and the UK look like they are headed for a challenging couple of months, with recession very likely for both economies. The U.S., on the other hand, looks resilient,” he added.

The euro fell below 99 cents on Wednesday after dipping as low as $0.9864 on Tuesday, its lowest since October 2002. Europe’s single currency was last up 0.8% at US$0.9985.

The European Central Bank is seen likely to deliver a massive 75 basis-point (bp) rate hike on Thursday, but these expectations have done little to support the euro given a battered European economy and Russia’s decision to keep the key Nord Stream 1 gas pipeline shut indefinitely.

In contrast, a report overnight showed the U.S. services industry unexpectedly picked up last month, underpinning the view that the economy is not in recession.

Also on Wednesday, the Bank of Canada raised interest rates by 75 bps to a 14-year high on Wednesday, as expected, and said the policy rate would need to go even higher as it battles raging inflation.

Despite the BoC rate hike, the U.S. dollar was little changed against the Canadian currency at C$1.3141.

Moves in the FX markets were most dramatic on the yen, whose tumble, even by its own recent standards, has been precipitous. Since the beginning of August, the yen has plummeted by 10.1% against the dollar.

At current dollar/yen levels, speculation is also growing that Japan could intervene to prop up the currency.

“Every time the yen weakens, it asks the BOJ (Bank of Japan) a question, as to whether now is the time to abandon YCC (yield curve control)?,” wrote Alan Ruskin, macro strategist at Deutsche Bank (ETR:DBKGn) in its latest research note.

“When nothing more than verbal intervention is at hand, the market can read from the lip service that the authorities are still some way from tightening monetary policy.”

Japan’s Chief Cabinet Secretary Hirokazu Matsuno told a news briefing that the administration would like to take necessary steps if “rapid, one-sided” moves in currency markets continue, ratcheting up the rhetoric.

However, many analysts see intervention as difficult given that global central banks are more focused on inflation rather than exchange rates.

Elsewhere China’s yuan sank to a two-year trough, closing in on the 7-per-dollar mark despite steps by authorities to stem its decline. The onshore yuan weakened to a low of 6.9808, the lowest since August 2020, and the offshore yuan was even closer to the key level, falling as low as 6.997 per dollar.

Cryptocurrency bitcoin earlier slumped to the lowest since June 19 at $18,540, extending a 5% tumble from Tuesday. It was last up 1.6% at $19,078.


Currency bid prices at 3:14PM (1914 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change


Dollar index 109.7300 110.3400 -0.55% 14.705% +110.7900 +109.6300

Euro/Dollar $0.9993 $0.9907 +0.87% -12.09% +$1.0003 +$0.9875

Dollar/Yen 144.0550 142.7900 +0.90% +25.15% +144.9850 +142.7500

Euro/Yen 143.95 141.41 +1.80% +10.46% +144.0000 +141.3800

Dollar/Swiss 0.9778 0.9845 -0.60% +7.28% +0.9869 +0.9772

Sterling/Dollar $1.1511 $1.1517 -0.06% -14.89% +$1.1522 +$1.1407

Dollar/Canadian 1.3135 1.3148 -0.05% +3.93% +1.3209 +1.3130

Aussie/Dollar $0.6757 $0.6732 +0.34% -7.07% +$0.6765 +$0.6699

Euro/Swiss 0.9771 0.9749 +0.23% -5.77% +0.9781 +0.9729

Euro/Sterling 0.8679 0.8597 +0.95% +3.32% +0.8688 +0.8596

NZ $0.6064 $0.6041 +0.37% -11.41% +$0.6070 +$0.5997


Dollar/Norway 10.0145 10.0330 +0.02% +13.92% +10.0840 +9.9905

Euro/Norway 10.0073 9.9262 +0.82% -0.06% +10.0256 +9.9061

Dollar/Sweden 10.7158 10.7886 +0.20% +18.83% +10.8426 +10.6967

Euro/Sweden 10.7088 10.6877 +0.20% +4.64% +10.7150 +10.6682

Resilient U.S. dollar soars to 24-year high vs yen, 37-year peak vs sterling

Analysis-Sterling returns to the 1980s, and it may get cheaper stillBy Reuters – Sep 07, 2022

By Tommy Wilkes and Dhara Ranasinghe LONDON (Reuters) – Sterling’s slide against the dollar to a rate last seen in 1985 has sparked talk of a dramatic spiral downwards that ends…

Fed Sees ‘Weak’ Growth Ahead as Inflation Squeezes ConsumersBy – Sep 07, 2022

By Yasin Ebrahim — The outlook for future economic growth remains “generally weak” at a time when rising food and rent prices have forced consumers to switch…

Carrefour unveils 30 euro shopping basket in Spain after government price cut proposalBy Reuters – Sep 07, 2022

MADRID (Reuters) – Supermarket chain Carrefour (EPA:CARR) will sell Spanish consumers a basket of 30 basic goods for 30 euros, the company said on Wednesday, days after Spain…

Our Apps

Terms And Conditions
Privacy Policy
Risk Warning

© 2007-2022 Fusion Media Limited. All Rights Reserved.

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

Analysis-Sterling returns to the 1980s, and it may get cheaper still

Previous article

Apple picks Globalstar for emergency satellite service on iPhone 14

Next article

You may also like


Leave a reply

Your email address will not be published.

More in Latest News