The dollar weakens against the euro and the yen
The dollar is slightly declining against the euro and the yen, rising in price against the pound, investors are waiting for the results of the September meeting of the European Central Bank and evaluate the statements of members of the leadership of the Federal Reserve System.
The ECB is expected to raise key interest rates following the results of the September meeting immediately by 75 basis points (bp). The ECB has only once raised its base rate so sharply – a few days after the launch of the euro in 1999, but then it was a short-term technical adjustment, the Financial Times notes. The results of the meeting will be announced at 15:15 Moscow time on Thursday.
“There are no doves left in the ECB, only moderate and radical hawks,” said Katharina Utermeul, chief European economist at Allianz (ETR:ALVG) SE.
The yen has been the main casualty of the dollar’s recent rally as the Japanese currency is particularly sensitive to rising US long-term government bond yields, Investing.com writes.
“Any attempts to return to the 140 yen/$1 level have been short-lived, and in recent days the pair hit 144 yen/$1 for the first time since 1998,” wrote OANDA Senior Analyst Craig Erlam. to the dollar.”
The yen is under pressure from more hawkish comments from the Fed. Thus, the vice-president of the US Central Bank, Leil Brainard, said the day before that the Fed would have to raise the base interest rate to levels at which there would be a slowdown in economic activity.
As of the early morning of September 8, the euro rose against the dollar by 0.09% – to $1.0015 compared to $1.0006 at the close of the previous session.
The rate of the American currency against the yen fell by 0.13% – to 143.56 yen against 143.69 yen the day before.
The pound sterling is down 0.13% to trade at $1.1518, compared to $1.1533 at market close on Tuesday.
The ICE-calculated index, which shows the dynamics of the US dollar against six currencies (the euro, the Swiss franc, the yen, the Canadian dollar, the pound sterling and the Swedish krona), is down 0.1%, the broader WSJ Dollar Index is up 0.1%.