2024-02-14T05:00:54+00:00
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/ The dollar traded near its highest levels in three months against its major counterparts on Wednesday, as traders backed away from bets on the first interest rate cut by the Federal Reserve (the US central bank) following surprisingly high inflation figures in the United States overnight.
The US currency’s rise above 150 yen for the first time since November 17 prompted Japan’s top currency diplomat to hint at the risk of intervention if the yen’s “rapid” and “speculative” declines continue, according to Reuters.
Fed funds futures are currently pricing in no rate cuts in March, with a less than 50% chance of a May easing, according to LSEG’s rate probability app, after the consumer price index (CPI) rose 3.1% in January from a year earlier, versus an estimated 2.9% rise.
The dollar-yen pair tends to track long-term US Treasury yields, which rose overnight and then rose to a fresh two-and-a-half-month high of 4.33% on Wednesday.
The dollar has added about 10 yen to the price since the beginning of this year.
Meanwhile, the dollar index – which measures the greenback against six major currencies, including the yen, euro and pound – was trading just below a three-month high of 104.96 hit on Tuesday.
The euro was steady at $1.0710 after falling to a three-month low of $1.07005 overnight.
Sterling was little changed at $1.2594, having fallen about 0.3% on Tuesday. That was well above recent lows, with strong U.K. economic data suggesting the Bank of England will be slower than its major peers to cut interest rates.
The Australian dollar fell to a three-month low of $0.6443 hit overnight, and was last trading at $0.64545.
The leading cryptocurrency regained its composure after briefly falling from around $50,000 to $48,325 overnight, before finally trading at $49,560. It had risen nearly 31% from a low on Jan. 23 to a more than two-year high of $50,385 on Tuesday ahead of U.S. consumer price index data.