Dollar medal shines, while yen staggers

The dollar is currently impressive with its strength and is approaching a two-year high, supported by a restrictive US interest rate policy. In contrast, the Japanese yen is fighting heroically but cannot hold its ground, reaching a five-month low. After the drastic movements triggered by the dollar tailwind, the currencies are taking a short break. The South Korean won fell to a 15-year low, the Canadian dollar to a four-year low, and the Australian and New Zealand currencies to two-year lows. Central banks from Brazil to Indonesia have been striving to defend their struggling currencies. Meanwhile, the Bank of Japan showed little movement regarding an interest rate hike, even though the Federal Reserve recently indicated fewer rate cuts for the next year. The dollar was on solid ground and aimed to reach a new two-year high against a basket of currencies. This was enabled by the assessment that US interest rates could remain high for longer. Attention is now turning to the release of the core PCE price data, the Fed’s preferred inflation measure, which could provide further clues about the economic future of the USA. The euro is weakening, experiencing a weekly decline, and the British pound resembles shattered hopes of an inflated rate hike and economic uncertainties, while the Australian and New Zealand dollars are also facing a tough week.