Thu, May 23, 2024

The Dollar Falls as Markets Rebound

Dollar

The Dollar Falls as Markets Rebound

The U.S. dollar fell on Monday as improved market sentiment lifted stocks and riskier currencies. At the same time, the yen rose on reports that Japan is considering revising a decade-old plan to combat deflation.

After the U.S. Federal Reserve and the European Central Bank (ECB) raised interest rates and hinted at future increases the week prior, the dollar, which measures the value of the dollar against a basket of 6 major currencies, fell 0.2% to 104.580, undoing some of the gains it had made.

Following a brutal selloff last week, risk sentiment recovered, driving European stocks higher, and currencies like the euro and sterling partially recovered the losses from the previous two sessions. The haven dollar has increased 9% this year due to worries about the world economy and widespread inflation. However, it declined by almost 7% in the fourth quarter as investors bet that the peak of inflation and the beginning of an economic recovery.

On news that Japan is considering changing a key monetary policy following the appointment of a new Bank of Japan governor in April, the Japanese yen increased 0.2% on the day to 136.420 per dollar. The joint statement signed in 2013, which reportedly promised the central bank to reach the 2 percent inflation target as soon as possible, is likely to be revised, according to government sources.

Ruble Drops

On Monday, the Russian ruble plunged past 68 to a more than seven-month low against the dollar, harmed by low oil prices and worries that sanctions on Russian oil could hurt the nation’s export earnings.

The ruble’s value against the dollar fell by 5.3% to 68.02, the lowest level since May 11.

The exchange rate fell 4.2% to 72.00 against the euro, the lowest level since May 6. In terms of the yuan, it dropped 5% to 9.74, its lowest point since early July.

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