According to market data, the US dollar is rising and targeting its best week in the past three months over the yen. On Friday, this revelation came to light after the Federal Reserve Chair and reviews from Federal Officials iced market expectations on the peaking US rates.
Cryptocurrencies saw a rise in their market values as well, based on records from last month. Bitcoin had topped the list, but Ethereum has taken the lead in recent news based on the Exchange-Traded Funds approval by the US Securities and Exchange Commission (SEC).
Dollar outperforming Yen
Policymakers commented on Thursday and stated their thoughts on not being sure that the interest rates are high enough to battle inflation. Jerome Powell commented that the Federal Reserve Chair and other officials explained their views, which influenced the market prices as investors received the hawkish sentiments that sent a rise in the currency value.
The US Dollar stood near its one-year high at 151.38 against the yen last Friday. This was a touch of a one-week high. The same was recorded for dollars against New Zealand and Australian dollars. Market analyst at CMC, Tina Teng, expressed her views on the matter, stating, “Powell’s speech was quite hawkish, and that just really hit sentiment.”
The Australian Dollar slipped to a week low of $0.6352 after its last stand at $0.6359 during the strategy of the week. The New Zealand dollar decreased to $0.5886 from its value of $0.893 at the beginning of the session.
Fed Officials’ remarks came after a week since the United States central bank left steady interest rates. They solidified expectations that interest rates could peak, and this would impact the financial sector and cause plummeting of the Dollar and the Treasury yields.
Recent data shows the opposite of this as the greenback retraced and cemented its footing in the past 7 days, eyeing a weekly return of 1.3% against the Yen. This has been a new record since August.
Sentiments on the dollar’s performance over the yen
Carol Kong, Commonwealth Bank of Australia’s currency strategist, commented on the news, stating:
Dollar/yen did trend higher this week, and it’s now back above 151. It does raise the risk of the BOJ stepping into the (forex) market to strengthen the yen, but I think markets are expecting no intervention unless the dollar/yen moves to about 152.
Carol Kong
The Kiwi and the Aussie also stepped down, eyeing a decrease of 1.8% and 2.4%, respectively, against the Dollar. This has been the steepest drop witnessed in three months.
Kong added, “Even though we don’t expect Powell to deliver on the tightening bias, that tightening bias does support the dollar.” Additionally, the Euro also dropped by 0.56% to $1.0668, while Sterling dropped by 1.3% to $1.2218.
The Australian central bank is in its quarterly Statement on Monetary Policy. The release on Friday highlighted a caution detail on the risks of a further upside inflation surprise that reports the recent hike in interest rates. This also raises forecasts for the region’s employment status and economic growth.
The crypto space also experienced some action amid exchange-traded funds plans by major crypto players, the latest one being BlackRock’s intentions of a spot Ethereum ETF.
Crypto-based ETFs have positively affected the crypto market as Ethereum’s recent ETF registration ignited Ethereum’s rally to above $2,170 at the time of writing. This was a 10.85% increase that was over Bitcoin’s 0.37% day increase tagged at $36,630 at the time of writing.
