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The Dollar Is up From a One-Week Low

by Carl Steward
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dollarThe Dollar Is up From a One-Week Low

The dollar was up in Asia on Friday morning, clawing back from a one-week low caused by the Federal Reserve’s decision to raise interest rates in the United States. The US Dollar Index, which measures the value of the greenback against a basket of other currencies, rose 0.57 percent to 104.014.

The USD/JPY exchange rate increased 1.30 percent to 133.93. The yen fell dramatically after the Bank of Japan indicated earlier that it would keep policy ultra-loose despite rising inflation; meanwhile, global central banks tightened monetary policy.

The AUD/USD pair fell 0.41 percent to 0.7016, while the NZD/USD pair fell 0.33 percent to 0.6341.

The USD/CNY pair declined 0.02 percent to 6.7014, while the GBP/USD pair dropped 0.38 percent to 1.2304. Global central banks are aggressively tightening monetary policy to contain rising inflation.

On Wednesday, the Federal Reserve of the United States raised interest rates for the first time since 1994. On Thursday, the Swiss National Bank unexpectedly boosted rates by 50 basis points, while the Bank of England lifted interest rates to 1.25 percent.

Yen Still Fragile

The US dollar strengthened against the Japanese yen in early European trade Friday as the Bank of Japan maintained its ultra-easy monetary policy in contrast to its neighbors’ rapid tightening. Japanese officials attempted to support their battered currency earlier Friday; they delivered a rare joint statement expressing concern over recent severe dips in the yen; the strongest warning that Tokyo may act to protect the currency as it approaches 20-year lows.

The yen remains fragile if some improvement in risk sentiment raises safe-haven support, leaving it open to indications of quickly rising rates and aggressive Fed tightening.

Later in the day, the release of US industrial and manufacturing production will provide guidance; industrial production should rise 0.4 percent in May compared to a 1.1 percent increase in April. The manufacturing output should rise 0.3 percent in May, following a 0.8 percent increase the previous month.

The post The Dollar Is up From a One-Week Low appeared first on forexinsider24.com.

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