Dollar index slips to 98.6 as yen rallies further
Dollar index fell to around 98.6 for a third straight session to its weakest level in four months, driven mainly by yen’s rapid rise. Investors weigh US inflation readings and Fed policy ahead of next week’s meeting.
6 on Wednesday, its third straight session lower, reaching a four-month low as the yen extended gains. US Treasury Secretary Scott Bessent warned traders against betting on the yen, saying he has “pretty good insight” on what the Bank of Japan will do when he is making a call and intervening with the yen. Investors are also awaiting key US inflation readings this week for further clues on the Federal Reserve’s policy outlook before next week’s meeting. Markets are pricing in roughly a 60% chance of a 25-basis-point Fed rate hike after stronger-than-expected jobs data released Friday.
The European Central Bank and the Bank of Japan are also expected to tighten monetary policy this month, while oil prices keep rising on escalating hostilities in the Middle East, adding to inflation risks and boosting rate hike bets.