The U.S. dollar index continued to hover at a seven-month low on Friday (13th) and fell more than 1% this week. The yen continued to extend its gains, rising more than 3 percent against the dollar this week as investors speculated that the Bank of Japan (BOJ) would adjust monetary policy next week.
In late New York trading, the ICE U.S. Dollar Index (DXY), which tracks the greenback against six major currencies, edged down 0.05% to 102.20, and hit its lowest level since June 6 during the session. DXY fell 1.6% for the week.
The United States announced on Thursday (12th) that the consumer price index (CPI) in December showed signs of cooling inflation, which strengthened expectations that the Federal Reserve (Fed) will slow down the pace of interest rate hikes. Patrick Harker, president of the Federal Reserve Bank of Philadelphia, recently also believed that it would be reasonable to raise interest rates by 1 yard in the future.
Goldman Sachs strategists pointed out that the recently released US inflation data for December may be the conclusion for the Fed to raise interest rates by 1 yard after the meeting on February 1, but at the same time warned that central banks should not take inflation lightly.
Separately, U.S. consumers are optimistic that price pressures will ease back next year to spring 2021 levels, according to a University of Michigan survey released Friday.
The yen rose more than 1% to 127.86 yen against the US dollar, hitting a new high in more than seven months and surging more than 3% this week. The Yomiuri Shimbun recently reported that the Bank of Japan will review the side effects of the yield curve control (YCC) policy at its meeting next week. The news boosted the yen to rise 2.4% on Thursday.
When global central banks started tightening cycles one after another in response to the rapid rise in inflation, the Bank of Japan has always stood alone and insisted on maintaining an ultra-loose policy. Weeks will change or even cancel YCC, paving the way for the appreciation of the yen.
Barclays foreign exchange analysts released a report predicting that as the Bank of Japan further adjusts its policy, the yen’s appreciation rate is expected to be as high as 2.7%.
Japan’s 10-year government bond yield broke through the new upper limit set by the central bank on Friday, intensifying the pressure on the central bank to cancel or modify the YCC. Conduct additional bond purchases.
After rising for four straight days this week, the euro retreated from a nine-month intraday high on Friday, down 0.17% to $1.0834, but still gained 1.8% for the week.
Both Germany and France announced better-than-expected economic data, bringing hope that the two largest economies in the euro zone will emerge from recession, but the euro failed to get a boost.
Sterling edged up 0.2 percent to $1.2230, its highest close in about a month and up more than 1 percent for the week. The UK announced that its gross domestic product (GDP) increased by 0.1% in November, which was lower than the previous value but better than the expected monthly decrease of 0.2%.
Under the Fed’s aggressive interest rate hikes, the pound has plummeted 10.6% against the dollar for the whole of 2022, but since hitting an all-time low in September last year, the pound has achieved three consecutive monthly gains against the dollar.
The Australian dollar and the New Zealand dollar have different trends. As commodity currencies, the Australian dollar continued the upward trend of the previous two days, rising slightly by 0.1% to US$0.6973, while the New Zealand dollar fluctuated lower, depreciating 0.1% to US$0.6383.
The Canadian dollar retreated from a more than one-month high, losing 0.2 percent to 1.3391 Canadian dollars to the U.S. dollar.
As of Saturday (14th) at about 6:00 Taiwan time Price:
The dollar index was at 102.1812. -0.0734% The euro was trading at 1.0831 dollars to the euro. -0.1420% The pound was trading at $1.2232 against the dollar (GBP/USD). +0.1408% The Australian dollar is trading at 0.6976 US dollar (AUD/USD). +0.1651% The U.S. dollar was trading at 1.3391 Canadian dollars to the U.S. dollar. +0.1840% USD/JPY was trading at 127.84 yen per dollar. -1.1414%