The yen reached an eight-week peak against the dollar on Thursday, boosted by a Bank of Japan official’s suggestion for continued rate hikes. Meanwhile, the pound dropped as the Bank of England reduced rates, citing expected inflation and slower growth, leading sterling to fall by 0.8% to $1.24065.
The dollar index rose against a basket of currencies, standing at 107.92, as global market participants contemplated the possibility of avoiding a trade war. With tariff tensions absent, all eyes are on the upcoming U.S. payrolls report, which could impact future U.S. monetary policy decisions.
On the geopolitical front, Trump’s decision to suspend tariffs on Mexico and Canada and impose new levies on Chinese goods has influenced currency trends. The yen’s strength was propelled by hawkish BOJ rhetoric, while expectations of U.S. Federal Reserve rate cuts continue. These developments underscore the complex dynamics in global currency markets.
(With inputs from agencies.)
