Dollar near 19-month highs
The dollar steadied near its highest levels in 19 months, driven by expectations of a larger US interest rate hike and rising bond yields, pushing the yen close to the 160 barrier amid readiness for Japanese intervention, while the euro recorded notable declines.
The US dollar steadied on Friday near its highest levels in 19 months, driven by growing expectations of a larger interest rate hike by the Federal Reserve and rising bond yields. This pushed the Japanese yen close to the 160 yen per dollar barrier, putting traders on alert for possible intervention by Japanese authorities. Two-year Treasury yields rose by 34 basis points over the past two sessions, the largest two-day increase in three and a half years. The euro fell 0.1% to $1.1049, near its lowest level against the US currency since April 2025, heading for its biggest weekly loss since late September. Fed officials warned this week that inflation in the United States remains high, and some indicated readiness to raise interest rates by 50 basis points if price pressures do not ease. According to the CME FedWatch Tool, traders see a 14.5% probability of a large rate hike next month, while this probability was completely ruled out last week.