The dollar at record levels against the yen and the pound

The dollar at record levels against the yen and the pound
The dollar at record levels against the yen and the pound

The dollar took advantage of its safe haven status and the Fed’s determination on Thursday to reach a peak since 1998 against the yen and since 2020 against the pound. Around 11 a.m. in Paris, the greenback took 0.17% to 139.20 yen and 0.21% to 1.1597 dollars for one pound. “Risky currencies remain under pressure against the safe haven dollar as surprisingly strong inflation data and concerns over jumping energy prices, especially in Europe, dampen risk appetite investors“, explains Matthew Ryan, analyst at Ebury.

As a result, the pound, which had already plunged 4.5% against the dollar in August, its worst monthly performance since the end of 2016, is dangerously approaching $1.1412, a threshold below which the currency will be at its most low since 1985. The yen reached 139.68 yen, a level not seen since 1998, when the currency is usually considered a safe haven.

Dependence on China

But it is suffering from the very accommodating monetary policy adopted by the Bank of Japan, and by the dependence of the Japanese economy on the health of China. However, Chinese manufacturing activity collapsed in August, according to an independent index, and the country continues to follow a strict zero Covid strategy despite a much lower number of contaminations than the rest of the world.

Read alsoEuro drops to $1.0001 on recession fears

New confinementsdampen expectations on the strength of the economic rebound in the second half of the yearcommented Lee Hardman, analyst at MUFG. In this gloomy context, the euro has held up a little better in recent sessions, even if it lost 0.16% to 1.0038 dollars on Thursday. “Investors reacted positively to a series of interventions by European Central Bank officials who defend a 75 basis point hike in the key rate“Notes Matthew Ryan. The ECB will meet on September 8.

The article is in French

Tags: dollar record levels yen pound

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