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Fed doubts lift Dollar to new highs, Yen sinks to 10-month low 

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The Dollar surged on Thursday, marking its biggest jump in six weeks, after the Federal Reserve’s minutes suggested a US rate cut in December was less probable.


At the same time, the Yen slumped as traders wagered that Japan would not intervene right away to halt its decline.


During the Asian session, the Yen fell to a 10-month low of 157.48, deepening its drop following Finance Minister Satsuki Katayama’s comment that foreign exchange issues were not specifically discussed in her meeting with Bank of Japan Governor Kazuo Ueda.


The Yen has fallen about 6% since Prime Minister Sanae Takaichi became her party’s leader, despite an increase in Japanese bond yields. Markets remain nervous about the large amount of borrowing required to finance her stimulus proposals, Reuters reports.


After sliding beyond 157 per Dollar and returning to levels seen at the start of the year, traders now think Japan’s authorities might step in if the Yen approaches 160 or if there are any further abrupt swings.


On Thursday, Chief Cabinet Secretary Minoru Kihara described the currency moves as sharp, one-sided, and worrying.


Outside Japan, the Euro, Pound, New Zealand Dollar, and Australian Dollar all weakened against the greenback after the Federal Reserve’s October meeting minutes showed that “many” officials had already dismissed the possibility of a December rate cut, while “several” still viewed a cut as likely.


In Asian trading, the Euro slipped to a two-week low of $1.1510, and the British Pound also edged down to $1.3040.


Whereas the New Zealand Dollar, which plunged 1% on Wednesday to a seven-month low of $0.5591 amid widening differences between New Zealand and US interest-rate outlooks, stabilised slightly on Thursday at $0.5611.


Markets are fully expecting a rate cut in New Zealand next week.


In contrast, the likelihood of a US rate cut in December has dropped to below 25%, after having been seen as almost guaranteed just a month earlier.


The US Dollar index gained 0.5% overnight, breaking above its 200-day moving average, and at the time of writing was up 0.15% at 100.25.

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Mauritius,
J. Balcikonio str. 9,
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Lithuania,

media contact

About

deVere Group – Foreign Exchange’s Public Relations Department deals with all areas of the media and external communications including international, national, regional, local, trade, consumer, print, broadcast, social and online. The Department aims to provide a helpful service to journalists, broadcasters and editors, amongst others, and reply to all media enquiries, including urgent enquiries out of hours, within agreed deadlines.

Contact

Our press office does not have access to client details and will not be able to assist with individual client enquiries. Please contact deVere Group – Foreign Exchange’s Head of Public Relations on [email protected] or call +44 2071220925.