Sat, December 03, 2022

Yen Continues to Recover from a More Than One-Year Low

Euro, Yen and dollar

The good news came from Japan, as the yen continued to recover from a more than one-year low near 111 per dollar, briefly strengthening back below 110 on April 6. However, the U.S. stabilized near an almost two-week low against a basket of its peers on Tuesday. The U.S. currency moved in tandem with Treasury yields from recent peaks despite signs of a powerful U.S. economic recovery.

The dollar index fell to 92.527 in the Asian session. It is the worst result since March 25. The softer turn came less than a week after reaching an almost five-month top at 93.439.

Interestingly, the world’s reserve currency has risen strongly in 2021, along with Treasury yields. Investors bet on a faster U.S. pandemic rebound than other developed countries thanks to massive stimulus and aggressive vaccinations.

However, the dollar’s declined this week even after positive monthly payrolls data and the highest reading for services industry activity on record. The current situation may indicate that much of the bullish outlook is priced in for now.

On Tuesday, benchmark 10-year Treasury yields continued their retreat, falling below 1.7% early in the Asian session, from a peak of 1.776% last week. A level not seen since January of 2020.

That’s even as the powerful economic outlook boosted the U.S. stocks to record highs. Nevertheless, strategists see room for further dollar gains. They said that the run of strong data cements the U.S. dollar’s unbeatable growth rebound credentials.

The Australian dollar slightly fell to $0.76415 on April 6, after rallying 0.8% to start the week. Australia’s central bank left policy unchanged on Tuesday.

Yen, British pound, and cryptocurrencies

As in the case of the yen, the British pound also strengthened its position on April 6. It rose to a 2-½ week high of $1.3915 in Asia, building on the previous session’s 0.6% advance.

The world’s largest cryptocurrency traded around $58,882 on April 6, easing back a little after a two-day gain. Bitcoin reached a record high at $61,781.83 in the middle of last month.

This week, the cryptocurrency market capitalization reached an all-time peak of $2 trillion. Gains over the last several months attracted demand from both institutional as well as retail investors. Cryptocurrencies such as Bitcoin and others gained popularity all over the globe. This factor helped cryptocurrencies to reach a historic result on Monday.

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