Dollar down but near a five-year high against yenwritten by Bella Palmer
The U.S. Dollar Index that tracks the greenback against a basket of other currencies was down 0.21% to 98.860
The dollar was down on Wednesday morning in Asia but was near a five-year high against the yen. Investors await the U.S. Federal Reserve’s latest policy decision, with the conflict in Ukraine and the surging number of COVID-19 cases in China also on their radars.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies was down 0.21% to 98.860 by 3:38 AM GMT.
The USD/JPY pair inched down 0.01% to 118.27, the strongest level since January 2017. Japanese trade data released earlier in the day showed that exports grew 19.1% year-on-year and imports grew 34% year-on-year in February 2022. The trade balance was –668.3 billion yen ($5.65 billion) and the adjusted trade balance was –1.03 trillion yen ($0.0087 trillion).
The AUD/USD pair inched up 0.08% to 0.7202, after falling to $0.71650 during the previous session for the first time since Feb. 28. The NZD/USD pair inched down 0.03% to 0.6767.
The USD/CNY pair edged down 0.17% to 6.3598, while the GBP/USD pair edged up 0.12% to 1.3053.
The euro continued to crawl back up from its plunge to a nearly 22-month low earlier in the month. The single currency edged up 0.14% higher to $1.09695, clawing up from a low of $1.08060 hit on Mar. 7.
U.S. Treasury yields climbed ahead of the Fed’s policy decision, which will be handed down later in the day. This gave the dollar a boost vis-a-vis the yen, with investors fully priced for the first interest rate hike in three years and giving 13% odds of a half-percentage point increase.
The Bank of England will hand down its policy decision on Thursday, with the Bank of Japan’s decision following a day later.
The Australian dollar also came under pressure, as its top trading partner China deals with its latest COVID-19 outbreak. Numbers more than doubled to a two-year high on Tuesday, and areas such as the southern city of Shenzhen and Jilin province are currently under lockdown.
This kept the dollar index around the 99 mark after it hit a high of 99.415 at the beginning of the previous week. The dollar was also near its highest level this month to its riskier Australian counterpart, with commodity prices retreating from multi-year peaks as Russia and Ukraine continue talks that could lead to a ceasefire.
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