Marketmind: Dollar Strength Keeps Yen Under Pressure
October 3, 2023
A look into the day beyond European and the Global markets as per Ankur Banerjee.
Traders are still in alerting mode over the expectations for the intervention of the Japanese currency as the yen has crawled near to 150 per dollar, becoming a victim to the solid dollar that has measured a fresh ten month peak compared to its biggest peers.
With more of a hawkish oratory within the night from the policymakers of the Federal Reserve about the need for the interest rates to stay higher for long enough to fight inflation, and with Treasury Yields at their 16 year peak, the risk appetite of investors has not yet disappeared as Europe has woken up.
Tuesday also brought up fresh verbal warnings about the yen, with Shunichi Suzuki, the Japanese Finance Minister, who said that the authorities kept a close watch on the currency market and stood ready for a response.
Suzuki also added that the intervention would be decided by the volatility, which would not target any specific levels.
Traders have also kept a wary eye for over a couple of weeks on the probable intervention as the “will they won’t they” discussion goes on.
The dour mood is all set to continue, with the futures that indicate a lower open in the European markets. The pan-European STOXX 600 has also touched its lowest point on Monday in more than six months and will probably test a further low till Tuesday, with very minute economic data on the deck to draw the attention of investors away from the rising yield and rate jitters.
Meanwhile, the Central Bank of Australia held steady interest rates on Tuesday for the fourth month but yet again warned that there maybe a further tightening required to bring the inflation to heel within a “reasonable timeframe.”
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