# Resilient U.S. dollar soars to 24-year high vs yen, 37-year peak vs sterling
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-09-08
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Dollar Hits 24-Year High Against Yen and 37-Year High vs.
Meta Description: Discover the latest on the surging US dollar and how it contrasts with Europe and Japan, impacting global currency markets.
URL: https://financedigest.com/resilient-u-s-dollar-soars-to-24-year-high-vs-yen-37-year-peak-vs-sterlinghtml

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By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) -The dollar surged to a 24-year peak against the yen and a 37-year high versus sterling on Wednesday, as Japan’s dovish monetary policy and Europe’s economic problems contrasted with a relatively stronger U.S. economy and a hawkish Federal Reserve determined to bring down [inflation to its 2% inflation target](https://www.financedigest.com/the-mouse-that-roared-new-zealand-and-the-worlds-2-inflation-target.html "The mouse that roared: New Zealand and the world’s 2% inflation target").

The U.S. currency soared as high as 144.99 yen, hitting the level for the first [time since](https://www.financedigest.com/soccer-arsenal-reach-womens-champions-league-semis-for-first-time-since-2013.html "Soccer-Arsenal reach Women’s Champions League semis for first time since 2013") August 1998. It is now within a large leap of its 1998 high of 147.43. The [dollar was last up 0.9% at 144.09 yen](https://www.financedigest.com/yen-sinks-as-rates-outlook-diverges-nz-dollar-tumbles.html "Yen sinks as rates outlook diverges; NZ dollar tumbles").

Against sterling, the greenback hit $1.1407, the [lowest since](https://www.financedigest.com/britains-cost-of-living-crisis-sends-sterling-to-lowest-since-mid-july.html "Britain’s cost of living crisis sends sterling to lowest since mid-July") 1985 and last down 0.1% at $1.1509.

Increasingly, it is becoming a [growth](https://www.financedigest.com/success-story-synapse-to-accelerate-growth-and-create-jobs.html "Success Story Synapse to Accelerate Growth and Create Jobs") story and really a crisis story. We have China continuing to have a COVID-zero policy, and if anything continuing to double down, locking down more cities,” said Erik Nelson, macro strategist, at Wells Fargo in New [York City](https://www.financedigest.com/new-york-becomes-first-u-s-city-to-mandate-covid-vaccines-to-enter-restaurants-gyms.html "New York becomes first U.S. city to mandate COVID vaccines to enter restaurants, gyms").

Europe and the UK look like they are headed for a challenging couple of months, with [recession very likely for both economies](https://www.financedigest.com/world-bank-warns-global-economy-could-easily-tip-into-recession-in-2023.html "World Bank warns global economy could easily tip into recession in 2023"). The U.S., on the other hand, looks resilient,” he added.

The [euro fell below 99 cents on Wednesday after dipping as low](https://www.financedigest.com/euro-rises-after-spanish-cpi-dollar-slips-towards-8-mth-low.html "Euro rises after Spanish CPI, dollar slips towards 8-mth low") as $0.9864 on Tuesday, its lowest since October 2002. Europe’s single currency was last up 0.8% at US$0.9985.

The [European Central Bank](https://www.financedigest.com/dollar-outshines-euro-sterling-amid-european-bank-jitters.html "Dollar outshines euro, sterling amid European bank jitters") is seen likely to deliver a massive 75 basis-point (bp) rate hike on Thursday, but these expectations have done little to support the euro given a battered European economy and Russia’s decision to keep the key Nord Stream 1 gas pipeline shut indefinitely.

In contrast, a report overnight showed the U.S. [services industry unexpectedly picked up last month](https://www.financedigest.com/russian-services-activity-shrinks-for-third-month-running-in-dec-pmi.html "Russian services activity shrinks for third month running in Dec -PMI"), underpinning the view that the economy is not in recession.

Also on Wednesday, the Bank of Canada raised interest rates by 75 bps to a 14-year high on Wednesday, as expected, and said the policy [rate would need to go even higher](https://www.financedigest.com/dollar-jumps-as-powell-flags-higher-terminal-rate.html "Dollar jumps as Powell flags higher terminal rate") as it battles raging inflation.

Despite the BoC [rate hike](https://www.financedigest.com/uk-economys-unexpected-bounce-spurs-more-boe-rate-hike-talk.html "UK economy’s unexpected bounce spurs more BoE rate hike talk"), the U.S. [dollar was little changed against the Canadian currency](https://www.financedigest.com/u-s-dollar-advances-vs-major-currencies-as-risk-appetite-fades.html "U.S. dollar advances vs major currencies as risk appetite fades") at C$1.3141.

[Moves in the FX markets](https://www.financedigest.com/the-dressing-vinegar-and-condiments-market-to-move-towards-healthcare-models-of-convenience.html "The Dressing Vinegar And Condiments Market To Move Towards Healthcare Models Of Convenience") were most dramatic on the yen, whose tumble, even by its own recent standards, has been precipitous. Since the beginning of August, the [yen has plummeted by 10.1% against the dollar](https://www.financedigest.com/aussie-dollar-firm-as-bonds-tumble-yen-looks-past-boj.html "Aussie dollar firm as bonds tumble, yen looks past BOJ").

At current dollar/yen levels, speculation is also growing that Japan could intervene to prop up the currency.

Every time the yen weakens, it asks the BOJ (Bank of Japan) a question, as to whether now is the time to abandon YCC (yield curve control)?,” wrote Alan Ruskin, macro strategist at [Deutsche Bank](https://www.financedigest.com/deutsche-bank-equity-bear-market-rally-will-stretch-into-2023-dollar-weaker.html "Deutsche Bank: Equity bear market rally will stretch into 2023, dollar weaker") in its latest research note.

When nothing more than verbal intervention is at hand, the market can read from the lip [service that the authorities are still some way](https://www.financedigest.com/three-ways-the-data-cloud-can-keep-financial-services-competitive.html "Three Ways the Data Cloud Can Keep Financial Services Competitive") from tightening monetary policy.

Japan’s Chief Cabinet Secretary Hirokazu Matsuno [told a news briefing that the administration would like to take necessary steps](https://www.financedigest.com/uk-banks-and-insurers-told-to-step-up-help-for-struggling-customers.html "UK banks and insurers told to step up help for struggling customers") if “rapid, one-sided” moves in currency markets continue, ratcheting up the rhetoric.

However, many analysts see intervention as difficult given that global central [banks are more focused on inflation](https://www.financedigest.com/be-really-really-careful-on-inflation-bank-of-englands-haskel.html "Be ‘really, really careful’ on inflation – Bank of England’s Haskel") rather than exchange rates.

Elsewhere [China’s yuan](https://www.financedigest.com/dollar-slips-yuan-gains-on-china-pmi-hot-inflation-lifts-euro.html "Dollar slips, yuan gains on China PMI; hot inflation lifts euro") sank to a two-year trough, closing in on the 7-per-dollar mark despite steps by authorities to stem its decline. The onshore yuan weakened to a low of 6.9808, the lowest since August 2020, and the offshore yuan was even closer to the key level, [falling as low as 6.997 per dollar](https://www.financedigest.com/dollar-falls-to-nine-month-low-as-powell-notes-progress-in-disinflation.html "Dollar falls to nine-month low as Powell notes progress in disinflation").

Cryptocurrency [bitcoin earlier slumped to the lowest since](https://www.financedigest.com/dollar-retreats-headed-for-biggest-weekly-loss-since-mid-january-bitcoin-down.html "Dollar retreats, headed for biggest weekly loss since mid-January; bitcoin down") June 19 at $18,540, extending a 5% tumble from Tuesday. It was last up 1.6% at $19,078.

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[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 3:14PM (1914 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Dollar index 109.7300 110.3400 -0.55% 14.705% +110.7900 +109.6300

Euro/Dollar $0.9993 $0.9907 +0.87% -12.09% +$1.0003 +$0.9875

Dollar/Yen 144.0550 142.7900 +0.90% +25.15% +144.9850 +142.7500

Euro/Yen 143.95 141.41 +1.80% +10.46% +144.0000 +141.3800

Dollar/Swiss 0.9778 0.9845 -0.60% +7.28% +0.9869 +0.9772

Sterling/Dollar $1.1511 $1.1517 -0.06% -14.89% +$1.1522 +$1.1407

Dollar/Canadian 1.3135 1.3148 -0.05% +3.93% +1.3209 +1.3130

Aussie/Dollar $0.6757 $0.6732 +0.34% -7.07% +$0.6765 +$0.6699

Euro/Swiss 0.9771 0.9749 +0.23% -5.77% +0.9781 +0.9729

Euro/Sterling 0.8679 0.8597 +0.95% +3.32% +0.8688 +0.8596

NZ $0.6064 $0.6041 +0.37% -11.41% +$0.6070 +$0.5997

Dollar/Dollar

Dollar/Norway 10.0145 10.0330 +0.02% +13.92% +10.0840 +9.9905

Euro/Norway 10.0073 9.9262 +0.82% -0.06% +10.0256 +9.9061

Dollar/Sweden 10.7158 10.7886 +0.20% +18.83% +10.8426 +10.6967

Euro/Sweden 10.7088 10.6877 +0.20% +4.64% +10.7150 +10.6682

(Reporting by Gertrude Chavez-Dreyfuss in New York; Additional reporting by Alun John in London, Kevin Buckland in Tokyo, Tom Westbrook in Singapore; Editing by Chizu Nomiyama and Nick Zieminski)


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