World Economy

USD Hits 10-Month High Vs Yen

USD Hits 10-Month High Vs YenUSD Hits 10-Month High Vs Yen

The dollar rose to its highest since February against the yen on Monday as US bond yields climbed on the back of expectations of broadly higher inflation, driven by a 5% rise in global oil prices.

The Norwegian crown and Canadian dollar were the other big gainers after OPEC and non-OPEC producers struck their first deal since 2001 to curtail output jointly, driving crude prices to their highest levels in a year and a half, Reuters reported.

Added to gains for the euro and sterling that held the dollar flat against the basket of currencies used to measure its broader strength and traders said the market was cautious ahead of the US Federal Reserve’s meeting on Wednesday.

With a rise in interest rates fully priced in this week, the question is what sort of signal Fed chair Janet Yellen sends on the pace of more tightening next year and whether its board is nervous enough about the dollar’s strength to mention it.

“It’s going to be hard to have the energy to make new lows before the Fed,” said Richard Benson, co-head of portfolio investment at currency fund Millennium Global in London.

“An explicit mention of the currency in either the statement or the news conference and it might become more difficult for the dollar.”

The dollar rose 0.5% to trade above 116 yen for the first time since early February. It lost 0.4% against its Canadian equivalent and was 0.1% lower against the euro at $1.5760.


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