Dollar climbs to 20-year high on yen, tests 2-year high on euro According to Reuters


© Reuters. FILE PHOTO: An illustration shows a Japanese 10,000 yen bill featuring a portrait of Yukichi Fukuzawa, the father of modern Japan, Aug. 2, 2011. REUTERS / Yuriko Nakao


By Joice Alves

LONDON (Reuters) – The dollar rose on Tuesday to a fresh 20-year high against the Japanese yen and tested a two-year high against the euro, supported by high US Treasury yields .

Yields on 10-year US inflation-linked bonds are within range of hitting positive levels for the first time in two years.

Copper, which measures the greenback against six other currencies, surpassed 101 for the first time in more than two years. It was flat at 100.84 at 11:55 GMT.

The dollar’s gain was most prominent against the yen, climbing to the highest level of 128.46 yen against the Japanese currency since May 2002. It was last up 1.3% at 128. ,20 yen.

The dollar has gained 5.4% against the yen this month, which would be the second-biggest monthly percentage gain since 2016 after the previous month’s 5.8%.

The greenback rose to the highest level of 0.9492 since July 2020 against the Swiss franc.

The euro recovered some base, trading 0.1% higher against the dollar at $1.07935, but just stopped at last week’s two-year low of $1.0756. la.

“The policy divergence between the Fed and low-yield central banks (European Central Bank, Bank of Japan) continues to argue in favor of strength,” said Francesco Pesole, FX Strategist at ING. strength of the US dollar”.

Expectations that the US Federal Reserve will tighten its monetary policy have continued to support the dollar.

On Monday, the President of the Federal Reserve Bank of St. Louis James Bullard said US inflation was at “too high” as he reiterated his case for a rate hike to 3.5% later this year.

Meanwhile, the BoJ intervened to keep the yield on Japan’s 10-year government bond at 0% and no higher than 0.25%.

Many investors are betting the yen will fall further. The latest CFTC data for the week ended April 12 shows that short-term yen net positions are the largest in three and a half years.

Japan’s Finance Minister Shunichi Suzuki issued the starkest warning yet to the yen’s recent drop on Tuesday, saying the damage to the economy from the weakening currency is now greater. benefit from it.

Elsewhere, sterling was flat at $1.3019, amid a 17-month low against the dollar at $1.2973, reached last week.

European currencies have not been helped by the latest fighting in Ukraine.

The Aussie dollar briefly rallied to $0.740 from a one-month low on Monday, supported by a number of minutes released on Tuesday from the Reserve Bank’s April policy meeting. Australia, which suggests the central bank is moving closer to raising rates for the first time in more than a decade.

also managed to find its footing, trading around $40,800 after hitting a one-month low of $38,547 on Monday.

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