The dollar fell to a three-week low against its main rivals on Wednesday. This has fueled rumors of a less aggressive Federal Reserve, further evidence that the U.S. economy is deteriorating.
Ahead of the Reserve Bank’s rate decision next week, the Australian dollar gained just shy of the previous session’s 2 1/2-week high due to hotter-than-expected inflation statistics. After new British Prime Minister Rishi Sunak promised to steer the country out of an economic crisis and kept Jeremy Hunt as finance minister, the pound clung to the six-week high set on Tuesday.
Outlook on Global Financial Market
Yen’s sensitivity to U.S. interest rates put pressure on the dollar’s position against it. Despite this, the dollar managed to gain 0.22% to 148.265 and somewhat recover from Tuesday’s 0.7% decline. The dollar rose to a 32-year high against the yen on Friday, reaching 151.94. However, it dropped to 144.55 after two episodes of alleged Bank of Japan (BOJ) intervention. The BOJ should maintain stimulus levels on Friday, contrary to developed-market counterparts’ monetary tightening. However, fundamentals still support a lower yen.
Leave a Comment