The dollar fell slightly against the yen in the last session, but remained close to a 20-year high against the currency as the Bank of Japan (BoJ) resolutely defended its ultra-low interest rate policy, creating It contrasts sharply with the tightening monetary policy of the US Federal Reserve (Fed).
Traders said the dollar’s decline against the yen came at the same time as US Treasury yields also fell from their previous three-year highs, approaching the mark. 3%. Yields on 10-year US Treasuries fell 4 basis points in the last session to 2.8744%.
Besides, the yen recovered also because the market was worried about the BoJ might intervene with words, leading many speculators to increase buying Japanese yen when the bilateral meeting between the US Treasury Secretary, Yellen, and her Japanese counterpart is coming.
The USD exchange rate on the Asian market at noon on April 20 reached 129.43, the highest level not seen since April 2002, before falling to 127.72 yen at the end of this session, down 0.9% from the previous session. with the previous session.
“US yields have fallen and that provides an excuse for USD/JPY to move higher,” said Erik Bregar, director of currency and precious metals risk management at Silver Gold Bull in Toronto.
“Everybody’s been into Asian trading in the last few days to see if the BoJ is really intervening or just saying something,” Bregar said. intervention) and only saw the BoJ yield curve halve.
The BOJ is once again offering an unlimited amount of Japanese government bonds, which has impacted the yield on Japanese 10-year bonds, which are falling from a ceiling of 0.25%.
By contrast, 10-year US Treasury yields rose to a three-year high earlier in the day while inflation-adjusted yields hit positive territory for the first time since March 2020. , as policymakers’ hawkish comments bolstered expectations of a strong Fed rate hike.
“The Fed has a huge incentive to push rates up,” said Steve Englander, head of global currency research and North American macro strategy at Standard Chartered Bank in New York. “But they also have some options. If the economy slows down in the second half of the year, they can roll back some of the gains.”
Elsewhere, the euro rallied after media reports that some European Central Bank (ECB) policymakers had expected a first rate hike in early January. July 2022. The European common currency at the end of April 20 in Vietnam time increased by 0.5% to 1.0845 USD.
The Dollar index – which compares the USD with a basket of major partner currencies, including the Japanese yen, in the past session reached 101.03 – a level not seen since March 2020 – before falling. 100.33 at the end of the day, representing a 0.6% drop on the day.
The money market volatility index rose past 8% but remains below the 2022 high of 10% reached in March 2022.
In particular, the Russian ruble strongly increased back to 77 RUB/USD as before the conflict with Ukraine in a volatile trading atmosphere.
The Russian ruble on April 20 had a very short period of time reaching 71,885 RUB/USD, then falling to 77 RUB. Despite this session’s decline, the ruble remains around its highest level since February 24, 2022.
Against the euro, the ruble added 2% to 82 RUB, well above the all-time low of 132.41 hit on March 10 on the Moscow Exchange. Ruble trading activity remains down from levels seen before 24 February.
On Tuesday, Russia’s central bank slightly relaxed capital controls on export-focused companies outside the commodities and energy sectors, and extended the deadlines by which they need to convert foreign currency to rubles from 3 days to 60 days.
The country’s economy faces skyrocketing inflation and capital flight while grappling with the possibility of default after the West imposed tough sanctions on Moscow for sending tens of thousands of soldiers arrived in Ukraine on February 24.
The Chinese yuan continued to fall to a 6-month low of 6.3970 CNY/USD, 30 pips lower than the previous session.
In the cryptocurrency market, Bitcoin in the past session maintained around $41,000, although briefly jumped above $42,000.
Gold prices rebounded on the back of a weaker dollar as well as concerns about inflation and slowing economic growth due to the war in Ukraine.
Spot gold price at the end of April 20 in Vietnam time increased 0.2% to 1,952.70 USD/ounce. Before that, there was a time when the price was at $ 1,938.65, the lowest since April 8. The price of gold for delivery in June this session continued to drop 0.3% to $ 1,953.80.
Gold has performed relatively well, up about 7% this year, despite rising real yields and a stronger dollar, said Saxo Bank analyst Ole Hansen. USD. He added that concerns about inflation and growth had been “enhanced by the war,” combined with volatility in the stock and bond markets, leading investors increasingly to seek shelter. safe hiding.
References: Refinitiv, Coindesk