News Tech: The dollar hit a fresh five-year high against the yen on Friday following the strong US inflation report, while the euro struggled to hold on due to the European Central Bank’s hawkish bias. offset by growth risks arising from the Ukraine crisis. The greenback hit 116.55 yen in early trade, its highest level since January 2017. The dollar gained 1.5% against the yen this week, its biggest weekly gain since October. “The dollar-yen seems to be a yield game,” said Sean Callow, senior currency strategist at Westpac.
The Federal Reserve and the Bank of Japan have policy meetings next week, but while the Fed is certain to raise interest rates from their pandemic lows, the BOJ is likely to remain an outlier. rates and maintain a dovish stance on monetary policy, weighing on the yen. Data on Thursday showed consumer prices in the United States rose 7.9% year-on-year in February, the biggest annual increase in 40 years, even before war-fueled raw material prices. in Ukraine fully effective.
The ECB on Thursday announced that it would phase out stimulus measures in the third quarter, opening the door for a rate hike before the end of 2022 to combat soaring inflation. It also slightly lowered growth forecasts for this year and next, while raising inflation expectations, with ECB President Christine Lagarde calling the conflict a “turning point for the European economy”, which will slow growth but boost inflation. Negotiations between the foreign ministers of Ukraine and Russia on Thursday produced no tangible progress toward ending the war, now into its third week.