Written by Tom Westbrook
SINGAPORE (Reuters) – The dollar strengthened on Wednesday and the yen hit a 30-year low as stronger U.S. economic data cast doubt on the possibility of interest rate cuts, prompting Japan to intervene in foreign exchange markets. reached a certain level. 2022.
In Asian trading, the yen was trading at 151.97 yen to the dollar, down about 0.2% and its lowest level since the mid-1990s.
Japanese authorities will intervene to protect the yen at 151.94 yen in 2022, with the finance minister using the same language on Wednesday ahead of the intervention, saying Japan would take “decisive action” against excessive currency fluctuations. I warned you.
The yen was the worst performing of the major currencies in the quarter ending later this week, falling more than 7% against the dollar even after Japan exited negative interest rates last week.
“The market is very sensitive to the 152 region,” National Australia Bank strategist Rodrigo Catril said. “If we can break through that level, recent history would make intervention much more likely.”
Earlier, Bank of Japan board member Naoki Tamura reminded traders why they were selling the yen, reiterated his policy outlook for slow but steady normalization, and reiterated his policy outlook for slow but steady normalization, keeping Japan’s interest rates above the rest of the world for the long term. It emphasized that it would be set at a level below the same level.
On the other hand, the dollar has been trending higher on a quarterly basis as strong economic indicators and central bankers’ reluctance to cut interest rates have eased expectations for a significant rate cut this year.
The Chinese yuan and New Zealand dollar were near four-month lows.
The renminbi depreciated to 7.2285 yuan to the dollar, despite a firm correction in the trading band. The New Zealand dollar fell 0.2% to $0.5988, unsupported by the government’s downward revision to its economic growth forecast.
core focus
The market’s main focus this week will be on the US core inflation data to be released on Good Friday, but data released on Wednesday already showed better-than-expected US durable goods orders, pushing the dollar slightly higher ahead of that. .
“There are nagging concerns about the risk that the Fed will ease less than the market currently expects,” said Moh Siong Sim, a strategist at Bank of Singapore.
Australian figures released on Wednesday showed inflation remained at a two-year low of 3.4% in February, raising market bets that the country’s interest rates will fall next. has been strengthened. The Australian dollar fell 0.3% to $0.6512.
It decreased by 4.4% in the same quarter.
The euro was at $1.0829, roughly in the middle of the range it has maintained over the past year, and was down 1.9% in the quarter.
The Swiss franc, still reeling from Switzerland’s surprise interest rate cut last week, fell about 0.5% against the dollar on Tuesday to a four-month low of 0.9042 francs.
It fell about 7% in the first quarter of this year. The US dollar index rose 3% to 104.4 in the quarter.
The pound held steady at $1.2618, largely stable during the quarter, down just 0.8%.
Bank of England policy committee member Katherine Mann said on Tuesday that she had changed her mind last week to voting to keep interest rates on hold instead of raising them because consumers were becoming more stingy. But she still believes financial markets have priced in too many rate cuts.
(Reporting by Tom Westbrook; Editing by Sam Holmes and Lincoln Feast.)