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(New York=Yonhap Infomax) Jin Woo Choi – The US dollar strengthened for a second consecutive session.
The dollar index (DXY), which tracks the greenback against six major currencies, climbed to the mid-99 range, buoyed by continued hawkish remarks from Federal Reserve Chair Jerome Powell.
The yen tumbled as expectations for a Bank of Japan (BOJ) rate hike faded, further supporting the dollar’s rally.
According to Yonhap Infomax (screen number 6411), as of 16:00 on the 30th (US Eastern Time), the dollar-yen exchange rate stood at 154.065 yen, surging 1.256 yen (0.822%) from the previous New York close of 152.809 yen.
The yen remained under persistent downward pressure in New York trading as hopes for a BOJ rate hike receded.
The BOJ concluded its monetary policy meeting by voting 7-2 to keep its policy rate unchanged at 0.5%. The number of dissenting votes remained at two, the same as the previous meeting.
Nathan Tuft, Senior Portfolio Manager at Manulife Investment Management, commented, “The recent stance of the new Japanese government is growth-friendly. To achieve such policies, they are willing to accept a weaker yen and, in fact, may even prefer it.”
The euro-dollar exchange rate fell to $1.15641, down $0.00353 (0.304%) from the previous session.
The European Central Bank (ECB) held its monetary policy meeting and unanimously kept the deposit rate at 2.00%, marking a third consecutive hold.
ECB President Christine Lagarde said at a press conference, “From a monetary policy perspective, we are in a good position.”
She added that downside risks to growth have eased, but emphasized that inflation uncertainty remains high.
Carsten Junius, Chief Economist at Safra Sarasin, noted, “It is surprising that the statement did not mention downside risks to inflation. The absence of a dovish signal suggests the likelihood of a December rate cut has diminished.”
The dollar index rose 0.376 points (0.379%) to 99.550 from the previous session.
The dollar extended gains in New York trading, tracking the rise in US Treasury yields.
The move followed hawkish comments from Fed Chair Jerome Powell the previous day, who said, “Nothing is set in stone” regarding a potential December rate cut. The dollar index touched an intraday high of 99.723.
Although the euro strengthened on the ECB’s hawkish tone, briefly pushing the dollar index down to the 99.4 level, the index mostly hovered in the 99.5 range in late trading.
Aroup Chatterjee, strategist at Wells Fargo, said, “This move is an extension of the Fed’s hawkish stance. Additionally, with the BOJ effectively postponing a rate hike to December, the move received further support.”
The summit between US President Donald Trump and Chinese President Xi Jinping saw both sides take a step back, but underlying tensions remain. China’s rare earth export controls are only suspended for one year, and the US has not approved exports of AI-related products such as Nvidia’s Blackwell chips.
The offshore dollar-yuan (CNH) exchange rate rose 0.0138 yuan (0.194%) to 7.1113 yuan from the previous session.
The pound-dollar exchange rate fell 0.00496 dollars (0.376%) to $1.3145.
UK Chancellor Rachel Reeves came under fire for failing to register as a landlord despite renting out property. Reeves admitted the mistake and promptly applied for a license, but the opposition claims she should resign. The controversy is adding political pressure ahead of next month’s budget announcement.
Bank of America (BofA) stated in a report, “With a flood of fiscal news ahead of the budget announcement and a rising risk premium on the pound, a rebound in sterling may be constrained.”
jwchoi@yna.co.kr
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