September 25, 2023

Dollar Climbs A 24-year High Against Yen As US Yield Surges

Wednesday saw the USD run ahead of the Yen to hit a twenty-four-year high. The same event sent the Yen sliding in September after reaching critical levels. Hence, it required Japan’s interference in the currency market to save the gilt. 

USD Beats The Yen To The Upside

Gaining amid Asia’s trading session, the USD went as high as 146.39 Yen per Dollar. It was the first time visiting that height after August 1988. Following it dropped slightly, still holding a 0.2 percent profit at 146.18. 

Japan intervened for the Yen on September 22, 1998. At the time, the currency had slid to 145.90 per USD. Therefore, this made Japanese authorities enter the market to buy out Yen. 

Nevertheless, authorities have expressed willingness to take steps to control impulsive money moves. Although, there is no clarification as to the level they intend to react. 

Alvin Tan, head of Asian currency strategy at RBC Markets, shared his opinion on the situation. According to Tan, the bank won’t opt for holding the line at a particular level. That is since the Dollar consistently overhauls it.

Instead, BoJ would probably defend Yen at a high point. Afterward, be hopeful it drags down the Dollar-Yen rising speed. 

The USD’s actions trigger the Yen’s reactions. Recently, the distance between the US and Japan’s long-term bond yield caused the regular slump. The US ten-year yield touched a 14-year high at 4.006 percent overnight. 

Conversely, BoJ recorded a stunted growth on the Japanese ten-year yield. The bank marked a close-to-zero move from the bond note. 

Sterling Staggers As Other Currencies Waver

Sterling dived to a two-week low amid Asia’s trading session. Its action followed a warning by Andrew Bailey, BoE’s Governor. Andrew warned pensioners that the bank would wrap its bond-purchase scheme come Friday. 

Therefore, charging pensioners to balance their positions in three days starting Tuesday. Meanwhile, the currency recovered a little after a motion by the bank’s officials to lenders. Bankers had secretly revealed the bank might extend the deadline. 

As a result, the Sterling gained 0.5 percent, going up to $1.1015. Jordan Rochester boiled down the situation via email. According to Rochester, the currency is only on a short-term run. 

Britain’s bond purchase scheme was a measure to regulate its bonds’ sharp boosts. Also, to curb Sterling’s ground trajectory following the UK’s mini budget project. The Sterling recently hit a low of $1.0327.

In other news, the Euro dived to a record low of $0.9670. That is its lowest since September 29. It is currently trading at a close distance of $0.9715.

A report shows that Britain’s economy slid deeper by 0.3 percent. That was due to low production in Euro zones. At the moment, investors are expecting Christine Lagarde’s speech in Washington. 

The European Bank President would be at the IIF annual meeting. The outcome will signal if there are chances of another rate hike.

Leave a Reply

Your email address will not be published. Required fields are marked *

Previous post US Stocks Shed Gains Early, Bonds Slide
Next post Eurozone Bond Yields Shed Ahead Of CPI Data Upload