On Friday, the US dollar briefly reached the 150 level against the yen, which is being closely observed. This rise was supported by the increase in 10-year US Treasury yields to 5%, after Federal Reserve Chairman Jerome Powell indicated that there is still room for further interest rate hikes.
The yield on the benchmark 10-year Treasury note, which rose 5% for the first time in 16 years overnight, rose 30 basis points this week – its biggest weekly rise since April 2022.
The conflict in the Middle East prompted investors to seek safety in assets like gold and the Swiss franc, while Treasuries trading was fueled by interest rate expectations.
Despite the strengthening of the US stock market, the dollar did not experience a similar surge this week. It only made slight gains while hovering around the 150 mark against the yen. This figure is significant as it indicates the point at which many market players believe that the Japanese Ministry of Finance could step in and intervene to support the currency.
Speculators have increased their bullish bets on the dollar against G10 currencies to a one-year high this month.
On Friday, the USD/JPY pair rose to 150.00 before settling at 149.870, typically following US 10-year bond yields.
Traders expect no change in interest rates at the next Fed meeting.
According to a recent Reuters poll, the likelihood of reducing interest rates in the first half of next year is diminishing rapidly.
The pound dropped by 0.37% to two-week lows after October’s British consumer confidence collapse, following the previous month’s weak retail sales.
The British pound dropped 0.2% to $1.2116, reaching its lowest level in two weeks.
The euro has stabilized at $1.0572, while the Swiss franc is on track for its largest weekly gain against the dollar in three months, having risen by one percent due to demand from safe-haven flows.
The Swiss franc reached its highest levels against the euro since 2015, when the Swiss National Bank eliminated its peg between the two currencies. As of Friday’s latest trading, the Swiss franc settled at 0.94345 against the euro.
In the external market, the Chinese yuan settled at 7.3361 to the dollar in Asia. China kept its key lending interest rates unchanged at the monthly fixation on Friday, as expected by the market.