Yen, yuan hurt as Fed eyes faster hikes By Reuters
© Reuters. FILE PHOTO: Japanese 1000 yen banknotes and Chinese 100 yuan banknotes are seen in an illustration, in Beijing, China January 21, 2016. REUTERS/Jason Lee
By Tom Westbrook
SINGAPORE (Reuters) – The dollar was heading for its seventh straight weekly gain against the yen on Friday and its best one-week rise in more than two years as rising U.S. yields lift the greenback.
China eases monetary policy and Japan pegs government bond yields near zero, while overnight Federal Reserve Chairman Jerome Powell says a 50 bp rate hike basis was on the table at the next meeting in two weeks.
The remark, while more or less in line with market expectations, sent US five-year yields above 3% for the first time since 2018 and negated a rebound in the euro.
The euro last bought $1.0837 and is not far above a two-year low, even as markets start pricing in higher rates – with German two-year yields hitting a eight-year peak overnight.
The yen is down 1.6% for the week and last traded at 128.44 to the dollar, just above Wednesday’s 20-year low of 129.43. The held above 100 at 100.61.
The yuan fell through its 200-day moving average this week and hit a fresh seven-month low at 6.4830 in offshore trade early in the session. [CNY/]
“The (swap) market has now priced a 146 basis point tightening for the next three (Fed) policy meetings,” said Commonwealth Bank of Australia (OTC:) analyst Carol Kong.
“The dollar could get some additional support from safe-haven demand today if the April PMIs raise concerns about the global growth outlook,” she added, referring to the data from the data. purchasing managers’ index expected in Europe and the United States.
Growth concerns have capped oil price gains recently and, alongside worries about economic damage from lockdowns in China, weighed on commodity currencies overnight.
The Australian dollar fell 1% on Thursday and hovered around its 50-day moving average at $0.7363 in morning trade. The New Zealand dollar also fell 1% overnight and edged lower to $0.6723 on Friday. [AUD/]
Japanese Finance Minister Shunichi Suzuki said on Friday that the yen’s recent declines were “sharp”, and his remark appeared to limit yen losses, although he added that he had not expressed concern. about it during a meeting with US Treasury Secretary Janet Yellen.
Japan’s core consumer prices rose at the fastest pace in more than two years in March, raising the risk that policymakers will try to strengthen the currency to relieve households squeezed by rising housing costs. energy and imported food.
The British pound hovered at $1.3022. [GBP/]
Bid rates for currencies at 0051 GMT
Description RIC Last US Close Pct Change YTD Pct Highest Bid Lowest Bid
$1.0834 $1.0831 +0.03% +0.00% +1.0842 +1.0833
128.5400 128.2700 +0.19% +0.00% +128.5550 +128.3300
139.26 139.06 +0.14% +0.00% +139.3100 +139.0000
0.9544 0.9533 +0.13% +0.00% +0.9544 +0.9535
1.3019 1.3028 -0.05% +0.00% +1.3035 +1.3021
1.2598 1.2584 +0.13% +0.00% +1.2600 +1.2569
0.7357 0.7371 -0.19% +0.00% +0.7377 +0.7357
Dollar/Dollar 0.6719 0.6734 -0.20% +0.00% +0.6736 +0.6719
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