Strong Dollar Hits 5-Month High Amid Rate Cut Speculation
U.S. Dollar Surges on Positive Economic Data
The U.S. dollar reached its highest level in almost five months on Tuesday following stronger-than-expected economic data. This led investors to reconsider their expectations of a June rate cut, resulting in a boost for the currency.
Japanese Intervention Slows Dollar’s Gains Against Yen
Although the dollar made significant gains against the yen, fears of intervention by Japanese officials tempered its rise. Long-term U.S. Treasury yields reached a two-week high, impacting the currency pair.
Euro and Sterling Experience Fluctuations
The euro fell to a mid-February low, while sterling remained stagnant near its December lows. Economic data revealed a deepening factory downturn in the eurozone.
Inflation Concerns Delay Rate Cut Speculation
Investors expressed concerns about inflation levels as U.S. ISM manufacturing survey data indicated a sharp rise in sector prices. Federal Reserve Chair Jerome Powell’s cautious stance on lowering borrowing costs further fueled speculation.
Yen Stability Amidst Dollar’s Surge
The Japanese yen remained relatively stable against the dollar, with officials wary of currency fluctuations. Despite the Bank of Japan’s recent interest rate hike, further tightening measures are approached cautiously.
Market Volatility Impacts Yuan and Bitcoin
The yuan fell to a 4-1/2-month low due to a strong dollar, while Bitcoin experienced a sudden drop in value. Cryptocurrency market fluctuations continue to impact investor sentiment.
