The US dollar is strengthening against the euro and the pound sterling, but is declining sharply against the Japanese yen on expectations that the Bank of Japan will continue to tighten monetary policy and that the Federal Reserve will soon begin easing.
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International Currency market
The DXY index calculated by ICE, which shows the dollar's performance against six currencies (euro, Swiss franc, yen, Canadian dollar, pound sterling and Swedish krona), falls by 1.15%, the broader WSJ Dollar Index – by 0.22%. p>
The euro/dollar pair as of 9:10 is trading at $1.0901 compared to $1.0913 at the close of the session last Friday, the euro is losing about 0.1%.
Rate The pound against the dollar falls by 0.7% and amounts to $1.2715 against $1.2804 at the end of the previous session.
The value of the American currency paired with the yen fell by 3%, to 142.12 yen compared to 146.55 yen at the end of last week. The yen is trading at its highest in seven months.
Read: Forecast of the dollar and euro exchange rates for August 5-9: is there a threat of a new devaluation of the hryvnia
Recall
Last week The Bank of Japan raised its key interest rate to 0.25% and announced a reduction in monthly bond purchases. Most analysts believe that this decision marks the beginning of the process of normalization of monetary policy and by the end of the current fiscal year (until March 2025) we will see two more rate hikes.
Meanwhile, a number of weak statistical data from the United States instilled confidence in the market that the Federal Reserve will lower the key interest rate in September, and some experts admit that the reduction will not be the usual 25 basis points, but 50 bp.
In particular, last Friday it became known that the number of workers jobs in the American economy increased by only 114 thousand in July after an increase of 179 thousand a month earlier, and unemployment in the United States rose to the highest level since October 2021, 4.3%.
- Dollar Euro Currency