FOREX-The US dollar climbs to a near 20-year high against the yen as more Fed hikes loom

Band Hannah Lang and Saikat Chatterjee

WASHINGTON/LONDON, April 13 (Reuters)The US dollar climbed to a near 20-year high against the weak yen on Wednesday, as the Federal Reserve’s aggressive tightening contrasted sharply with the Bank of Japan’s ultra-loose monetary policy.

The greenback reached 126.32 yen JPY=EBSits highest level since June 2002. It was last up 0.3% to 125.82 yen.

Against a basket of six major currencies =USD, the dollar climbed to 100.52, the highest since May 2020, but was last little changed at 100.29. It has gained nearly 3% so far this month and was on track for its biggest monthly gain in nine months.

Bank of Japan Governor Haruhiko Kuroda said on Wednesday that the recent rise in inflation driven by rising import costs could hurt the economy, underscoring the central bank’s determination to maintain monetary policy. super accommodating.

Data showing U.S. producer prices in March jumped 11.2% on a yearly basis, the largest increase since the 12-month data was first calculated in November 2010, bolstered market expectations that the Fed will raise interest rates by half a percentage point at next month’s policy meeting.

“The United States economy appears to be isolated enough and showing enough signs of inflation that the Fed will continue to take a very, very hawkish line and act accordingly, and in doing so, of course, to improve the value of the dollar,” said Juan Perez, director of trading at Monex USA in Washington.

The dollar also benefited from weaker-than-expected US inflation data on Tuesday, prompting Federal Reserve Governor Lael Brainard to point out that the central bank is still proceeding with a series of interest rate hikes. despite some signs of falling prices.

The euro, on the other hand, fell to $1.0809, its lowest level against the dollar in more than a month.

Investors sounded cautious ahead of a policy-setting meeting at the European Central Bank on Thursday.

Although the market does not anticipate any change in interest rates, market participants will expect a more hawkish tone from ECB President Christine Lagarde, which could trigger a rate hike later in the year. .

The money markets anticipate a tightening of interest rates by around 70 basis points by December.

Still, the euro will likely remain rocked by the ongoing Russian invasion of Ukraine. The war, now in its second month, has driven up gasoline prices and led to a global spike in food prices, as Russia and Ukraine are major exporters of raw materials, whose wheat and sunflower oil.

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Currency bid price at 11:00 a.m. (1500 GMT)

The description

RIC

Last

Closing of the previous session

Percentage change

Percentage change since the beginning of the year

High bid

Low bid

dollar index

=USD

100.2000

100.3300

-0.12%

4.743%

+100.5200

+100.2000

euro dollar

EUR=EBS

$1.0848

$1.0826

+0.20%

-4.58%

+$1.0849

+$1.0809

dollar/yen

JPY=EBS

125.7200

125.4000

+0.26%

+9.21%

+126.3050

+125.3500

Euro/Yen

EURJPY=

136.36

135.73

+0.46%

+4.63%

+136.7500

+135.7100

Dollar/Swiss

CHF=EBS

0.9344

0.9324

+0.23%

+2.46%

+0.9356

+0.9316

British pound/dollar

GBP=D3

$1.3038

$1.3000

+0.29%

-3.59%

+$1.3041

+$1.2973

Canadian dollar

CAD=D3

1.2630

1.2641

-0.08%

-0.10%

+1.2676

+1.2611

Australian/Dollar

AUD=D3

$0.7411

$0.7455

-0.58%

+1.96%

+$0.7475

+$0.7392

Euro/Switzerland

EURCHF=

1.0134

1.0098

+0.36%

-2.24%

+1.0138

+1.0089

Euro/pound sterling

EURGBP=

0.8318

0.8327

-0.11%

-0.96%

+0.8343

+0.8314

New Zealand Dollar/Dollar

USD=D3

$0.6775

$0.6850

-1.09%

-1.01%

+$0.6901

+$0.6753

Dollar/Norway

NOK=D3

8.8210

8.7725

+0.64%

+0.22%

+8.8685

+8.7695

Euro/Norway

EURNOK=

9.5714

9.5029

+0.72%

-4.41%

+9.5916

+9.4933

Dollar/Sweden

SEK=

9.5239

9.5061

+0.29%

+5.60%

+9.5651

+9.5048

Euro/Sweden

EUREK=

10.3316

10.3013

+0.29%

+0.96%

+10.3459

+10.3022

World exchange rateshttps://tmsnrt.rs/2RBWI5E

(Reporting by Hannah Lang in Washington and Saikat Chatterjee in London; Editing by Tomasz Janowski, David Holmes, Will Dunham and Gertrude Chavez-Dreyfuss)

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