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(Seoul=Yonhap Infomax) Sung Jin Kim – The US dollar extended its rally for a fourth consecutive trading day, buoyed by mounting expectations that the Federal Reserve will keep rates unchanged next month. The US Dollar Index (DXY), which measures the greenback against a basket of six major currencies, edged above the 100 mark.
Amid growing fiscal concerns, both the Japanese yen and British pound posted sharp declines. The euro-yen cross hit another all-time high, with the yen’s value against the euro falling to its lowest level since the euro’s introduction in 1999.
According to Yonhap Infomax (screen number 6411), as of 16:00 on the 19th (Eastern Time), the dollar-yen exchange rate stood at 156.963 yen, up 1.434 yen (0.922%) from the previous New York close of 155.529 yen. The pair briefly traded above 157 yen, marking its highest level since mid-January.
The euro-yen rate climbed to 180.91 yen, up 0.810 yen (0.450%) from 180.10 yen in the prior session. In intraday trading, the euro-yen surpassed 181 yen for the first time ever, underscoring the yen’s historic weakness against the euro since the single currency’s launch.
The euro-dollar exchange rate slipped to 1.15262, down 0.00545 (0.471%) from 1.15807, marking a fourth straight session of declines.
The DXY rose 0.602 points (0.604%) to 100.190, its first close above 100 since the 6th of this month.
Market pricing for a Fed rate cut next month, as reflected in interest rate futures, plunged to the low 30% range, solidifying expectations for a hold.
The US Bureau of Labor Statistics (BLS) announced the cancellation of the October employment report, citing the inability to conduct the household survey that produces the unemployment rate due to the federal government shutdown. The BLS said results from the October establishment survey, which covers nonfarm payrolls, will be released alongside the November jobs report. The November employment data will be published on December 16, after the Federal Open Market Committee (FOMC) meeting scheduled for December 9–10.
This means no official “weak jobs” data will be available to support rate cut expectations ahead of the FOMC.
The FOMC minutes for October, released in the afternoon, revealed a clear majority favoring a rate hold next month. The minutes stated that “many” participants suggested maintaining the current federal funds rate target range for the remainder of the year would be appropriate under their economic outlooks.
Oliver Allen, Senior US Economist at Pantheon Macroeconomics, noted, “The FOMC is much more divided than usual on the next policy step,” adding, “Today’s BLS announcement will reinforce a cautious stance.”
With Japanese Prime Minister Sanae Takaichi expected to announce a large-scale stimulus package this week, speculation mounted over possible intervention to stem further yen weakness.
Shaun Osborne, Chief FX Strategist at Scotiabank, commented, “In the short term, the yen continues to underperform and is diverging significantly from underlying fundamentals,” adding, “Japanese authorities are clearly monitoring the yen closely.”
The pound-dollar exchange rate fell to 1.30496, down 0.00970 (0.738%) from the previous session. With last month’s consumer price data meeting expectations, the likelihood of a Bank of England rate cut next month increased, while caution grew ahead of the Autumn Budget to be released on the 26th.
UK Prime Minister Keir Starmer sparred with Conservative Party leader Kemi Badenoch in the House of Commons over the Autumn Budget. When asked whether the ruling Labour Party would effectively raise taxes by freezing income tax thresholds, Starmer avoided a direct answer, stating the budget would be based on “Labour values” and reaffirmed the party’s commitment to addressing inequality.
The offshore dollar-yuan (CNH) rate rose 0.0080 (0.113%) to 7.1180.
sjkim@yna.co.kr
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