The Dollar was on track for a second consecutive quarterly gain and rose close to a four-decade top against the Yen on Friday as traders cautiously assessed Japan's determination to protect its currency, whilst awaiting US inflation data.
During the first campaign debate in Atlanta, Republican US presidential candidate Donald Trump launched a series of occasionally inaccurate attacks on President Joe Biden, as he faltered over his words a few times in the early exchanges, sending the Dollar up, Reuters reports.
The Yen reached its weakest since 1986 at 161.27 per Dollar, whilst the Euro lost 0.1% to trade at $1.0693 at the time of writing.
Elsewhere, the Australian and New Zealand Dollars dipped around 0.2% each at a respective $0.6631 and $0.6068.
“Biden came across poorly,” according to Jason Wong, market strategist at BNZ in Wellington.
He added that this hiked the odds of a Trump presidency and import tariffs, noting that traders were purchasing Dollars, though the movements were relatively modest.
The Dollar index, measuring the greenback against six peers, matched Wednesday’s eight-week top of 106.13 and has recorded a 1.5% gain for Q2 so far.
This marks the second consecutive quarterly gain as markets have lowered their expectations for US rate cuts over the past six months.
The Federal Reserve's preferred inflation measure, the personal consumption expenditures (PCE) index, is set to be released later on Friday. If its annual growth decelerated to 2.6% in May, as economists forecast, it could pave the way for rate cuts later this year, the Reuters report goes on to say.
Furthermore, Sterling remained flat on Friday at $1.2633 and was generally steady for the quarter as markets anticipated the UK’s upcoming general election next week, speculating whether Labour – if it secures an expected landslide victory – can rejuvenate the stagnant economy.
The Yen has been the quarter's biggest loser, declining 6% against the Dollar since the end of March and over 12% so far in 2024.
The Yen hit a record low against the single currency early on Friday at 172.38 per Euro. Data showed that core inflation in Japan's capital accelerated in June, though this did little to support the Yen.