The yen soared to an eight-week high against the dollar on Thursday, buoyed by a Bank of Japan policy board member’s suggestion of continued interest rate hikes. In contrast, the British pound fell sharply after the Bank of England opted to ease its monetary policy amidst forecasts of higher inflation and weaker economic growth.
Markets priced in further interest reductions by the Bank of England following the pound’s brief rally to a one-month high just the day before. Meanwhile, the dollar index remained robust against a basket of peers, despite recent fluctuations due to global trade dynamics.
U.S. President Donald Trump suspended planned tariffs on Mexico and Canada while imposing new levies on Chinese imports, influencing currency markets. The yen’s strength also reflected geopolitical tensions, with speculations of further impactful announcements from Trump.
(With inputs from agencies.)
