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Dollar is at all-time high against yen, while ECB remains precarious

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While traders wait to view inflation data from the United States of America, the US dollar has appreciated against the Japanese yen. It has now reached a value that is the highest in the past month. This rise would be exacerbated by a rise in government bond yields to overnight multi-year peaks. The euro is maintaining its aggressive tone in an attempt to hold back the appreciation of the US dollar in the near term. Dollar on the rise If we bring the situation forward a bit, the euro is pulling back from a three-month high against the Japanese yen. What resulted was the remark by Christine Lagarde, the president of the European Central Bank, who raised expectations of an aggressive rate hike. Looking at the current states of the US dollar and euro, most regulated brokers would advise a trader to take the wait-and-see attitude. However, the European Central Bank and the US Fed have both taken the aggressive tone, resulting in rising European zone and US debt yields, expecting rates to rise faster than expected. The US dollar and the Japanese yen are vying for better value. According to recently recorded figures, the US dollar rose to 115.96 before closing the transaction with a pulled back value of 115.43. The value of 115.96 is the highest recorded since January 10. A pullback doesn’t do much harm, but indicates that there will inevitably be fluctuation at certain points. Another participant who witnessed a figure worth noting was the Treasury yield. The value of the past 10 years rose to 1.97%, the highest level since November 2019. On the other hand, the 2-year yield reached 1.347, the highest since February 2020. CME’s FedWatch Tool predicts how much interest will be raised in the meeting of US policymakers scheduled for March. According to the data, nearly 70% of the market favors an increase of 25 basis points, and the remaining 30% of the market estimates an increase of 50 basis points. These are just price estimates by the market. The final call will be available for review once US policymakers complete their meeting. A statement on inflation in the US has also come to light. According to Mary Doly, president of the San Francisco Fed, inflation in the United States of America can be expected to rise beyond its current peak, only to recover later in the future. Meanwhile, the Dollar index has recovered from the value of 95.136. It now stands at 95,614. It was reported to have hit its all-time high of 97,441 late last month. The European Central Bank will monitor the development of the US dollar to ensure that there are no unnecessary gains in the short term. However, the US dollar’s medium-term gains are as good as they should be.
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