The US dollar held at high levels in early Asian trading on Friday after reaching a three-month high, as traders assessed signals from central banks, technology sector reports, and a preliminary tariff truce between the US and China. The dollar index, which measures its strength against a basket of six currencies, remained stable at 99.478 after the stock market fell on Wall Street on Thursday, according to Reuters, writes UNN.
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The dollar fell 0.1% to 153.935 yen after data showed that core consumer prices in Tokyo rose 2.8% in October compared to last year, indicating higher-than-target inflation and complicating the Bank of Japan's actions after it left rates unchanged.
Risk aversion favors the dollar. The Fed is unsure whether it will cut rates again. And the weakening of the yen, caused by what the Bank of Japan is doing, doesn't help.
Newly appointed Japanese Finance Minister Satsuki Katayama said on Thursday that she does not support previous claims that the real value of the yen should be close to 120-130 per dollar, citing her current position.
Traders lowered expectations for a Federal Reserve rate cut at the December 10 meeting: the probability of a 25 basis point cut fell to 74.7% from 91.1% a week ago, according to CME Group's FedWatch. The yield on 10-year US Treasury bonds approached a three-week high of 4.0989%.
The euro, meanwhile, strengthened by 0.1% to $1.1572 after the European Central Bank left rates unchanged at 2% for the third consecutive time, emphasizing that economic policy is in "good shape" due to reduced risks.