Economy

Dollar rises, yen flirts with intervention levels

Dollar rises, yen flirts with intervention levels

By Ankur Banerjee

(Reuters) – The dollar loomed large in fragile financial markets on Tuesday with concerns about rising interest rates, global growth and geopolitical tensions fretting investors, while the yen tested levels that prompted official intervention. The yen reached 145.80 per dollar overnight, just 10 points below its 24-year low before the Japanese government intervened to support it three weeks ago. Japan returned from Tuesday’s holiday and the JPY sat at 145.65. Strong US employment data and an expectation that Thursday’s high inflation numbers will remain stubbornly high are all choppy bets on anything but higher interest rates through 2023 and push the dollar to multi-decade highs.

Russia rained missiles on Ukrainian cities on Monday in response to the explosion that destroyed the only bridge linking Russia to the annexed Crimea, with the escalation that has put markets on a risk-averse state. The risk-sensitive Australian dollar hit a two-and-a-half year low of $0.6275 on Monday and hovered at $0.6296 early Tuesday. Analysts at National Australia Bank (OTC:) said it was a “market boy” selling and further declines are possible in the near term as sentiment is fragile.

The New Zealand dollar also hit a two-and-a-half year low of $0.5545 on Monday and is close to breaking pandemic lows, as weak data from China added to the jittery mood. “Our outlook for the global economy to enter a recession next year is in line with further gains in the dollar,” said Carol Kong, a strategist at the Commonwealth Bank of Australia (OTC).

It rose 0.053% to 113.12, not far from a 20-year high of 114.78 touched last month.

British markets remain on the alert and have not been completely calmed by the Bank of England’s aggressive bond buying and Finance Minister Kwasi Quarting has pledged to make some budget announcements.

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Bonds sold off sharply overnight and sterling was volatile, falling to a 10-day low of $1.1027 on Monday. The pound rose 0.28% to $1.1090 on Tuesday.

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Currency display prices at 0029 GMT

Description RIC Last US Close Pct Change YTD Pct High Bid Low Bid

Previous change

session

EUR/USD $0.9719 $0.9703 +0.15% -14.52% +0.9719 +0.9700

USD / yen 145.5700145.7300 + 0.02% + 26.73% + 145.7350 +145.7600

Euro / Yen 141.47 141.39 + 0.06% + 8.56% + 141.5200 + 141.3600

USD/CHF 0.9989 0.9994 + 0.10% + 9.66% +1.0002 +0.9994

GBP / USD 1.1090 1.1060 + 0.28% -17.99% +1.1091 +1.1056

USD/CAD 1.3782 1.3780 + 0.02% + 9.01% +1.3795 +1.3771

AUD/USD 0.6297 0.6299 -0.02% -13.37% +0.6300 +0.6284

NZ 0.5574 0.5566 + 0.15% -18.56% +0.5574 +0.5559

dollar / dollar

all spots

locations in Tokyo

spots in europe

twists

Tokyo forex market information from the Bank of Japan

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