Sep 06, 2022 03:03AM ET
By: AnalysisWatch
The U.S. dollar maintained its positive tone Tuesday, reaching a new 24-year high against the interest-rate-sensitive Japanese yen, while the euro rose from its lowest level since 2002 ahead of this week's European Central Bank meeting.
The dollar index, which tracks the greenback's exchange rate against a basket of six other currencies, rose 0.1 percent to 109.580 at 3:05 p.m. EDT after hitting 110.270 on Monday, the highest level in 20 years
Futures markets are pricing in a more than 50% chance that the Fed will raise interest rates by 75 basis points at its September meeting.
The dollar's strength was best illustrated Tuesday against the Japanese yen as U.S. monetary tightening widened the gap with stubbornly low interest rates in Japan.
The USD/JPY exchange rate rose 0.5% to 141.33, reaching its highest level since 1998.
The dollar weakened slightly from multi-year highs against the euro and sterling, although recession fears and the energy crisis mean both currencies remain weak.
EUR/USD rose 0.4% to 0.9969, regaining some ground after falling below 0.99 on Monday for the first time since 2002 after Russia decided to halt gas supplies through its main pipeline to Europe indefinitely.
The European Central Bank meets later this week and is expected to raise interest rates given that inflation in the eurozone is fast approaching double digits.
GBP/USD rose 0.6% to 1.1585 after falling to a 2-1/2-year low of 1.1444 on Monday as Liz Truss was to be confirmed as the UK's new prime minister.
Sterling benefited from reports that Truss had drawn up plans to avert an energy crisis by promising tax cuts and financial support for struggling homeowners.
Comments