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Dollar dips as yen rebounds from 39-year low
The dollar index was down 0.1% as yen strength followed expectations of faster BOJ rate hikes, while WTI jumped 3% to a six-week high.
The dollar edged lower, with the dollar index (DXY) down 0.1%, as the yen recovered from a 39-year low amid expectations for faster interest rate hikes from the Bank of Japan, according to Yahoo Finance.
Support for the dollar was limited by a separate driver, as WTI rallied about 3% to a six-week high, a move that can raise inflation expectations and potentially encourage tighter Fed policy. Higher US 10-year Treasury note yields also helped underpin the dollar by strengthening interest rate differentials.
In currency trading, the euro rose 0.14% versus the dollar on dollar weakness, and benefited from higher European government bond yields, including a 10-year German Bund yield that climbed to a two-month high of 3.192%. The euro also had support from short-covering ahead of the ECB meeting, where the ECB is expected to keep rates unchanged, with markets pricing a 5.0% chance of a 25 basis point hike.
Against the yen, USD/JPY slipped 0.07%, with the yen recovering slightly after Tuesday’s 39-year low, Yahoo Finance said, citing better-than-expected Japanese trade data.
Latest closeWTI crude $95.27 ▲3.4%|USD/JPY 158.89 ▲0.9%|Dollar index 101.29 ▲0.2%