Updated April 2nd, 2024 at 17:25 IST

Dollar surges to 5-month high, Yen remains steady amid intervention concerns

Fears of potential intervention by Japanese officials limited the dollar's gains against the yen, despite a surge in long-term US Treasury yields.

Reported by: Business Desk
Forex news | Image:Unsplash
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Dollar at 5-month high: The US dollar surged to its highest level in nearly five months on Tuesday, propelled by robust economic data that tempered expectations of a June rate cut and bolstered investor confidence in the currency.

However, fears of potential intervention by Japanese officials limited the dollar's gains against the yen, despite a surge in long-term US Treasury yields. The dollar index rose to 105.1, its peak since November 14, reflecting sharp gains following unexpected manufacturing expansion in the US

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Meanwhile, the euro saw a slight dip to its lowest point since mid-February before stabilising at $1.0745. Eurozone factory data further highlighted economic challenges as the manufacturing downturn deepened in March.

Sterling saw a modest uptick to $1.2563 from near its lowest level since December after reports showed improvement in the UK's manufacturing sector last month.

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The recent US ISM manufacturing survey indicated a significant increase in sector prices, fuelling concerns about prolonged inflation and delaying potential rate adjustments by the Federal Reserve. Fed Chair Jerome Powell's remarks last Friday also underscored the central bank's cautious approach to rate cuts.

Chris Turner, head of global markets at ING, attributed the dollar's strength to recent comments by Federal Reserve's Christopher Waller, suggesting a less dovish stance. He noted that US job openings data could influence the dollar's trajectory later in the day.

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The Japanese yen remained flat against the dollar, hovering at 151.67, amid ongoing concerns of intervention by Japanese authorities to counter disorderly currency movements. Finance Minister Shunichi Suzuki reiterated readiness to explore all options to address currency fluctuations.

Meanwhile, China's yuan fell to a 4-1/2-month low against the dollar, while Bitcoin experienced a sharp decline of 6.5 per cent to $65,250. The Swiss franc also weakened to its lowest level since November following unexpected interest rate cuts by the Swiss National Bank.

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(With Reuters inputs)
 

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Published April 2nd, 2024 at 17:25 IST