The Bank of Japan’s reluctance to raise interest rates is also a key factor in the yen’s weakness. The Japanese yen was among the worst hit by this, dropping to levels last seen during the Asian financial crisis in 1998. lending rates saw most regional currencies drop sharply against the greenback this year. Strength in the dollar, and a narrowing gap between Asian and U.S. Markets are pricing in an over 90% chance of a 75 basis point hike by the Fed next week. The central bank has indicated repeatedly that it will keep raising interest rates sharply until inflation shows clear signs of reaching its target. But the reading is still expected to be well above the Federal Reserve’s annual target of 2%. Markets are expecting inflation to retreat further from highs hit earlier this year, helped largely by easing fuel prices. consumer price inflation data due on Tuesday, which is largely expected to dictate the path of the dollar in the near term. The main point of focus this week is U.S. The bank hiked rates by a record 75 basis points last week, as it struggles to combat previously unseen levels of inflation.
Strength in the euro, which jumped 0.5% on Monday, also weighed on the greenback, as investors priced in more steep interest rate hikes by the European Central Bank this year. The greenback was subject to profit-taking as investors unwound some long bets after a month of strong gains. The dollar index sank 0.4% to 108.61, while dollar index futures also fell in a similar range. But a market holiday in China and Hong Kong kept regional trading volumes depressed. Pressure on most Asian currencies eased after the dollar fell further from a 20-year high hit last week. The Japanese yen rose 0.1%, while the South Korean won added 0.2%. inflation data due this week, while the euro extended its rally on expectations of more sharp interest rate hikes by the European Central Bank. Most Asian currencies moved little on Monday as caution kicked in ahead of key U.S. Create New Watchlist Create Create a new holdings portfolio Add Create + Add another position Close
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