LONDON JUNE 13 (Reuters) – The safe-haven dollar gained a two-decade high on Monday against major rival currencies, backed by fears of a global economic slowdown and strong bets on rising interest rates. the US Federal Reserve.
The yen was one of the many currencies to fall on the day, to its lowest level since the dollar since 1998, as the gap between Japanese and US benchmark yields widened after data U.S. Candidate Inflation on Friday Read more
A sell-off in the markets dropped European stocks for the fifth straight session, while Bitcoin fell 9% to an 18-month low of around $ 24,000. Read more
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The dollar index, which tracks the dollar compared to six major peers, gained up 0.5% on the day to 104.75, near a two-decade high of 105.01 in May. The latter rose 0.2% to 104.63.
Efforts by central banks to reduce rampant inflation will continue to be focused this week.
The Federal Reserve and the Bank of England are expected to raise interest rates at their meetings, and the Swiss National Bank is likely to do the same.
The Bank of Japan (BoJ) has so far resisted pressure to tighten policy, weakening the country’s currency. The political divergence has pushed the yen down more than 15% against the dollar since early March.
The yen fell 0.6% a day to 135.22 yen per dollar, its lowest level since 1998. Last time, it was broadly stable at 134.37 yen per dollar.
A senior Japanese government spokesman said Monday that Tokyo is ready to “respond appropriately” if necessary. Read more
“Overall, key developments continue to favor the yen’s weakness in the short term, but market participants will be more wary of the risk of intervention and / or a brutal change in BoJ policy next week.” said MUFG currency analysts in a note.
Downward pressure on the yen could spur speculation of a return to the weakness of the yen, which had not been seen since the Asian financial crisis in 1997, when it reached 140.00, the last time Japan intervened directly to support the currency, the note adds.
The euro, the pound sterling and the Swiss franc fell around a four-week low against the dollar of the day.
The euro fell 0.5% to $ 1.04560, and the latest fell 0.3% to $ 1.04775.
The pound fell 0.8% to $ 1.22165, after data showed the British economy shrank unexpectedly in April. Read more
The Swiss franc fell 0.5% to 0.99230 francs per dollar.
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Report by Iain Withers Additional report by Alun John in Hong Kong Edited by Mark Potter
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