Title: Dollar Up Near Two Decade High, BOJ Hands Down Latest Policy Decision
Apr 28, 2022 12:02AM ET
The dollar strengthened in Asia on Thursday morning, reaching levels not seen in two decades. The euro was weighed down by the emerging energy crisis in Europe and investors were also digesting the Bank of Japan's latest monetary policy decision.
The U.S. dollar index, which tracks the greenback against a basket of other currencies, rose 0.42% to 103.395 by 11:48 a.m. EDT. The index hit a five-year high of 103.28 and a further rise above 103.82 would take it to levels not seen since late 2002.
The USD/JPY pair rose 0.94% to 129.63 in March 2022. Industrial production rose 0.3% month-on-month and retail sales rose 0.9% year-on-year.
The AUD/USD pair fell 0.38% to 0.7099 as Australia released retail sales data during the day. The NZD/USD currency pair fell by 0.63% to 0.6503.
The USD/CNY pair rose 0.39% to 6.5858, while the GBP/USD pair fell 0.27% to 0.2515.
The euro remained at $1.0553 after hitting a five-year low of $1.0515 on Wednesday. It has fallen 4.6% so far in April and is heading for its worst month since early 2015. The single currency is now dangerously close to major chart support levels, which stretch from $1.0500 to the 2017 low of $1.0344. A break in either of these could lead to lows not seen since 2002 and would threaten a damaging fall below parity.
In addition to Europe's economic woes, this has made dollar-denominated energy more expensive. At the same time, Russia has cut off gas supplies to Poland and Bulgaria, which has pushed up prices.
These risks could also make the European Central Bank (ECB) cautious about aggressively tightening monetary policy, which could leave it far behind the US Federal Reserve. The ECB will publish its economic bulletin later today.