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Title: Dollar Up, Yen Down in a Tale of Two Central Banks

Mar 20, 2022 11:54PM ET

By: AnalysisWatch

The dollar gained in Asia on Monday morning, edging up to 119.3 yen against the Japanese yen, attacking the six-year high of 119.39 reached on Friday.

The U.S. Dollar Index, which tracks the greenback against a basket of other currencies, was up 0.05% at 98.278 by 11:47 PM ET.

The USD/JPY pair rose 0.01% to 119.19 as Japanese markets were closed for a holiday.

The AUD/USD pair fell 0.19% to 0.7401, while the NZD/USD pair rose 0.04% to 0.6905.

The USD/CNY pair rose 0.04% to 6.3640, while the GBP/USD pair fell 0.16% to 1.3159.

The yen continued to depreciate on Monday, while the Australian and New Zealand dollars remained favorable. A number of central bank policymakers around the world are scheduled to speak later in the week, including Jerome Powell of the US Federal Reserve.

CBA analysts forecast that movements in the pair may slow this week, but the dollar will continue to rise against the yen in the coming months as the gap between the US and Japanese interest rates widens.

The yen also hit a four-year low against the riskier Australian dollar, which has been boosted by the recent surge in commodity prices.

Further gains could be possible as the US Federal Reserve's rate hike cycle is now priced in and global risk sentiment continues to recover, which would typically support risk-friendly currencies, Barclays analysts added.

The euro was trading at $1.1044, with the conflict in Ukraine determining the future of both the single currency and the pound. Speeches by European Central Bank policymakers, including President Christine Lagarde, could also play a role.

Fighting continues in Ukraine after Russia invaded on February 24. Russia called on Ukraine to lay down its arms in the city of Mariupol, but Ukraine insisted that surrendering the city was out of the question.

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