U.S. dollar rises and hits a three-week high against the safe-haven yen after NY Fed President William Dudley’s comment

Dollar drops

Tuesday, after New York Federal Reserve President: William Dudley commented that United States inflation should rise alongside wages; the greenback rises and hits a three-week high against the safe-haven yen. The dollar rose to 111.775yen JPY= at one point, which is considered as its strongest level since May 26.

In accordance to this, that rise marked a gain of about 2.7% from the dollar’s near two-month low of 108.81 yen set last Wednesday. And in addition, the dollar last stood at 111.685 yen, which is up by 0.2% on the day.

New York Federal Reserve President: William Dudley’s comment on Monday was the reason for the greenback lift. He said that tightening in the labor market should help drive up inflation. As such, that helped balance concerns among some investors that could prevent the Federal Reserve from raising interest rates this year.

According to Teppei Ino, an analyst for Bank of Tokyo-Mitsubishi UFJ in Singapore: NY Fed president William Dudley’s comments reinforced the message from last week’s Federal Reserve meeting and gave the dollar a helpful boost. In addition, Teppei Ino also said that the dollar is now near some key technical resistance levels, which includes its May 24 intraday high of 112.13 yen.   

In relevance to this, the dollar has edged higher since the Federal Reserve on June 14 raised interest rates for a second time in 2017 and announced it would begin cutting its holdings of bonds and other securities later this year, while indicating that a recent softening in inflation was seen as transitory.

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