# Dollar gains against yen as Fed policy, debt ceiling in focus Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-05-22 Category: TRADING Category URL: https://financedigest.com/category/trading Meta Title: Dollar gains against yen as Fed focus Meta Description: Stay updated on the dollar's rise against the yen as investors await Fed decisions and news on the U.S. debt ceiling. Get the latest updates now! URL: https://financedigest.com/dollar-gains-against-yen-as-fed-policy-debt-ceiling-in-focushtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-05-22t022907z1lynxmpej4l02brtroptp4global-bond-jpmorgan-1736813983844-compressed.jpg) # Dollar gains against yen as Fed policy, debt ceiling in focus By Karen Brettell NEW YORK (Reuters) – The dollar rose against the Japanese yen on Monday, holding just below a six-month high, as investors waited on fresh signals on whether the U.S. Federal Reserve is likely to continue [hiking interest rates](https://www.financedigest.com/dollar-slips-before-expected-fed-rate-hike.html "Dollar slips before expected Fed rate hike") and watched for news that Congress will reach an agreement to raise the U.S. [debt ceiling](https://www.financedigest.com/wall-street-gains-dollar-climbs-on-solid-data-debt-ceiling-progress.html "Wall Street gains, dollar climbs on solid data, debt ceiling progress"). The greenback has bounced for the past two weeks as stronger than expected economic reports and hawkish Fed officials [keep the prospect of further interest rate](https://www.financedigest.com/ecb-needs-to-keep-interest-rates-sustainably-high-to-combat-inflation-lagarde.html "ECB needs to keep interest rates ‘sustainably high’ to combat inflation – Lagarde") increases alive. “The [dollar had a nice two-week bounce](https://www.financedigest.com/dollar-bounces-as-fed-seen-keeping-up-aggressive-rate-hikes.html "Dollar bounces as Fed seen keeping up aggressive rate hikes"), helped by rising U.S. interest rates,” said Marc Chandler, chief [market strategist at Bannockburn Global](https://www.financedigest.com/concern-over-us-default-risk-grips-global-markets-as-talks-resume.html "Concern over US default risk grips global markets as talks resume") Forex in New York. But comments from Fed Chair Jerome Powell on Friday that tighter credit conditions could mean fewer [rate hikes](https://www.financedigest.com/ecb-policymakers-back-jumbo-rate-hike-differ-on-balance-sheet-cut.html "ECB policymakers back jumbo rate hike, differ on balance sheet cut") pulled the greenback off its highs. “It seemed to me to be the strongest case yet for a pause,” Chandler said. “I look for some broad consolidation as we wait for the next shoe to drop.” The [dollar got a mild boost](https://www.financedigest.com/sterling-slides-as-bets-for-aggressive-u-s-tightening-boost-dollar.html "Sterling slides as bets for aggressive U.S. tightening boost dollar") after St. Louis [Fed President James Bullard said on Monday that the Fed may still need to raise its benchmark interest rate by another half-point this year](https://www.financedigest.com/u-s-dollar-rallies-to-more-than-2-year-hike-on-steep-fed-rate-hike-outlook.html "U.S. dollar rallies to more than 2-year hike on steep Fed rate hike outlook"). Minneapolis Federal Reserve President Neel Kashkari also said it was a “close call” whether he would [vote to raise interest rates or pause the central bank’s](https://www.financedigest.com/czech-central-bank-vice-gov-unlikely-to-vote-for-rate-cut-newspaper.html "Czech central bank vice-gov unlikely to vote for rate cut -newspaper") tightening cycle when it meets next month. The greenback was last up 0.36% on the day at 138.43 yen, just below six-month high of 138.75 reached on Thursday. The euro gained 0.04% to $1.0810, having [hit a more than seven-week low](https://www.financedigest.com/sterling-rebounds-after-hitting-16-month-low.html "Sterling rebounds after hitting 16-month low") of $1.0760 on Friday. The [dollar index](https://www.financedigest.com/dollar-index-jumps-after-u-s-retail-sales-show-surprise-rebound.html "Dollar index jumps after U.S. retail sales show surprise rebound"), which measures the greenback against six other major currencies, was up 0.19% at 103.22, hovering below last week’s high of 103.63, a level last seen on March 20. [Investors are also focused](https://www.financedigest.com/tesla-investors-to-focus-on-demand-issues-in-earnings-report.html "Tesla investors to focus on demand issues in earnings report") on negotiations to raise the U.S. debt limit, with the risk of a default seen as denting risk [sentiment](https://www.financedigest.com/dollar-stronger-as-inflation-worries-dampen-risk-sentiment.html "Dollar stronger as inflation worries dampen risk sentiment") even as it is viewed as unlikely. U.S. President Joe Biden and House of Representatives Republican Speaker Kevin McCarthy will meet to discuss the [debt ceiling](https://www.financedigest.com/world-stocks-climb-on-hopes-of-successful-debt-ceiling-outcome.html "World stocks climb on hopes of successful debt ceiling outcome") on Monday, after a phone call on Sunday that both sides described as positive. “Friday there was a bit of a setback but there’s a bit more optimism after the weekend,” said Francesco Pesole, FX strategist at ING. Markets are seeing a [deal on the debt](https://www.financedigest.com/dealing-with-sole-traders-debt-recovery-just-became-a-whole-lot-harder.html "Dealing with sole traders? Debt recovery just became a whole lot harder") limit and at the same time the Fed pushing back on rate cuts which is ultimately proving positive for the dollar. [Sterling slipped](https://www.financedigest.com/sterling-slips-as-boost-from-new-china-covid-rules-fades.html "Sterling slips as boost from new China COVID rules fades") 0.14% to $1.2428, after hitting a three-week low of $1.2392 on Thursday. The Aussie fell 0.12% to $0.6644. The New Zealand dollar rose 0.06% to $0.6280, with [traders ramping up bets to 1-in-3 for a half-point hike](https://www.financedigest.com/traders-ramp-up-bets-on-75-basis-point-ecb-sept-hike-bond-yields-jump.html "Traders ramp up bets on 75 basis-point ECB Sept hike, bond yields jump") by the Reserve Bank on Wednesday. The Chinese yuan [weakened to 7.0473 per dollar](https://www.financedigest.com/dollar-weakens-after-gains-all-week-debt-deal-hopes-boost-market-sentiment.html "Dollar weakens after gains all week; debt deal hopes boost market sentiment") in offshore trading, creeping back toward Friday’s six-month low of 7.0750. The currency has been under pressure on growing signs the country’s post-COVID-19 recovery may already be petering out, but got some respite on Friday after the People’s [Bank of China pledged to curb large](https://www.financedigest.com/banks-recover-75-of-defaulted-debt-owed-by-large-corporate-borrowers-finds-new-global-credit-data-report.html "Banks recover 75% of defaulted debt owed by large corporate borrowers, finds new Global Credit Data report") exchange rate fluctuations. ======================================================== [Currency bid](https://www.financedigest.com/evergrande-jitters-pull-risk-currencies-lower-dollar-gains-on-safety-bid.html "Evergrande jitters pull risk currencies lower, dollar gains on safety bid") prices at 10:21AM (1421 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Dollar index 103.2200 103.0400 +0.19% -0.261% +103.2900 +102.9600 Euro/Dollar $1.0810 $1.0807 +0.04% +0.89% +$1.0831 +$1.0795 Dollar/Yen 138.4300 137.9300 +0.36% +5.58% +138.6600 +137.5000 Euro/Yen 149.64 149.03 +0.41% +6.66% +149.9200 +148.8500 Dollar/Swiss 0.8976 0.8996 -0.21% -2.91% +0.8996 +0.8942 Sterling/Dollar $1.2428 $1.2446 -0.14% +2.77% +$1.2472 +$1.2414 Dollar/Canadian 1.3507 1.3497 +0.10% -0.28% +1.3517 +1.3485 Aussie/Dollar $0.6644 $0.6651 -0.12% -2.55% +$0.6668 +$0.6627 Euro/Swiss 0.9702 0.9720 -0.19% -1.95% +0.9722 +0.9678 Euro/Sterling 0.8697 0.8678 +0.22% -1.66% +0.8703 +0.8682 NZ $0.6280 $0.6276 +0.06% -1.11% +$0.6292 +$0.6262 Dollar/Dollar Dollar/Norway 10.8870 10.8790 +0.14% +11.00% +10.9050 +10.8740 Euro/Norway 11.7681 11.7442 +0.20% +12.14% +11.7925 +11.7416 Dollar/Sweden 10.5452 10.5170 +0.32% +1.32% +10.5542 +10.4994 Euro/Sweden 11.4005 11.3646 +0.32% +2.25% +11.4120 +11.3613 (Additional reporting by Samuel Indyk in London; editing by Jonathan Oatis) --- This blog is powered by Superblog. 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