Title: Dollar Down, Hits Five-Year High Against Yen as Fed Decision Looms
Mar 15, 2022 11:47PM ET
The dollar weakened in Asia on Wednesday morning but traded near a five-year high against the yen. Investors are awaiting the latest decision from the U.S. Federal Reserve, while also keeping an eye on the conflict in Ukraine and the rising number of COVID-19 cases in China.
The U.S. Dollar Index, which tracks the greenback against a basket of other currencies, was down 0.21% at 98.860 at 11:38 PM ET.
The USD/JPY pair fell 0.01% to 118.27, its highest level since January 2017, while Japanese trade data released earlier in the day showed exports rose 19.1% year-on-year in February 2022 and imports jumped 34%. The trade balance was -668.3 billion yen ($5.65 billion), and the adjusted trade balance was -1.03 trillion yen.
The AUD/USD pair rose 0.08% to 0.7202 after falling for the first time since February 28 to $0.71650 in the previous session. The NZD/USD pair fell slightly by 0.03% to 0.6767.
The USD/CNY pair fell 0.17% to 6.3598, while the GBP/USD pair rose 0.12% to 1.3053.
The euro continued to recover from its plunge to a near 22-month low earlier in the month. The single currency rose 0.14% to $1.09695, recovering from its low of $1.08060 on 7 March.
US government bond yields rose ahead of the Fed's monetary policy decision, which will be announced later in the day. This boosted the dollar against the yen as investors fully factored in the first-rate hike in three years, putting the probability of a half percentage point increase at 13%.
The Bank of England will announce its monetary policy decision on Thursday, and the Bank of Japan's decision will follow a day later.