US Dollar Domination: Record 34-Year High Against Euro and Yen

Key Takeaways:

Dollar is strong against a basket of peers after U.S. inflation data
Euro remains flat at $1.0748 after a 1% fall
Markets anticipating ECB rate cuts after hints from policy markers
ECB aims to remain non-committal about future cuts after June meeting
Market now pricing in 17% chance of Fed cutting rates in June
Canada’s dollar hits weakest level since November
Yen at 34-year low against the dollar, intervention fears rise in Tokyo
Bank of Japan Governor rules out direct response to currency moves for monetary policy
ECB policy meeting to focus on pace of cuts after June
Euro remains flat at $1.0748, pound up at $1.2561
Market expectations of rate cuts pushed back after the U.S. inflation data
Yen down nearly 8% against the dollar in 2022
Traders pricing in 43 basis points of cuts this year, lower than Fed’s projections
BOJ Governor Kazuo Ueda brushes aside speculation of raising interest rates due to yen’s falls
Yen hits lowest level vs. dollar since June 1990
Dollar expected to rise without intervention, could reach 155 yen range
Interest rate differentials and policies between Japan and the U.S. impacting currency exchange
Technology stocks drop, yen’s weakness supports export-oriented issues in stock market
Benchmark 10-year Japanese government bond yield climbs to highest level since November 2023

The U.S. dollar has strengthened against a basket of currencies following the release of positive inflation data, impacting the exchange rates of both the euro and the yen.
The euro has remained relatively stable, while markets anticipate potential rate cuts by the European Central Bank (ECB) after comments from policymakers.
The yen has depreciated significantly, hitting its lowest level against the dollar since 1990, leading to speculation of intervention by Japanese authorities.
Both the Bank of Japan and the ECB are closely monitoring the currency movements and considering their respective monetary policies in response.