FOREX-Dollar at 10-month high, yen weakens amid intervention watch

BY Reuters | ECONOMIC | 09/26/23 03:37 PM EDT
    (Updated at 1505 EDT)
    By Karen Brettell
       NEW YORK, Sept 26 (Reuters) - The dollar index hit a
10-month high on Tuesday while the Japanese yen came closer to
the key 150 level, where Japanese officials are seen as
potentially intervening to shore up the currency.
    Benchmark 10-year U.S. government bond yields have jumped to
16-year highs this month as economic data remains robust despite
higher interest rates.
    The Federal Reserve last Wednesday said that it may hike
rates further and was likely to keep them elevated for a longer
time as it battles to bring inflation closer to its 2% annual
target.
    "The story of September has been the jump in Treasury yields
and the spillovers into the currency market," said Adam Button,
chief currency analyst at ForexLive in Toronto. "The market has
expected the economic data to deteriorate and it hasn't."
    Minneapolis Fed President Neel Kashkari said on Tuesday that
a "soft landing" for the U.S. economy is more likely than not,
but added that there is a 40% chance that the Fed will need to
raise interest rates "meaningfully" to beat inflation.
    "It's just exceptionalism in the U.S., it's very hard to
argue with. We're just seeing that consistently strong data
there," said Joe Tuckey, head of FX analysis at broker Argente.
"The dollar is just a steamroller."
    The dollar index rose 0.26% on the day to 106.21, the
highest since Nov. 30. The euro fell 0.23% to $1.0567,
the lowest since March 16.
    Data on Tuesday showed that sales of new U.S. single-family
homes fell more than expected in August as the rate on the
popular 30-year fixed mortgage jumped above 7%, but  U.S. annual
home price growth accelerated for a second straight month in
July.
    U.S. consumer confidence also fell for a second straight
month in September amid worries about higher prices and the
political environment.
    The Japanese yen has suffered amidst the broad dollar rally,
raising speculation that Japanese officials will intervene in
the currency.
    Finance Minister Shunichi Suzuki on Tuesday said the
government was "watching currency moves with a high sense of
urgency", after the yen hit an 11-month low of 149.19.
    The yen bounced after Suzuki's comments, but later in the
day weakened back to 149.08.
    The British pound fell 0.45% to $1.2158, the lowest
since March 17.

    ========================================================
    Currency bid prices at 3:05PM (1905 GMT)
 Description      RIC         Last           U.S. Close  Pct Change      YTD Pct       High Bid    Low Bid
                                              Previous                    Change
                                              Session
 Dollar index                 106.2100       105.9500    +0.26%          2.628%        +106.2600   +105.8600
 Euro/Dollar                  $1.0567        $1.0592     -0.23%          -1.38%        +$1.0609    +$1.0562
 Dollar/Yen                   149.0700       148.8850    +0.13%          +13.71%       +149.1800   +148.7100
 Euro/Yen                     157.52         157.71      -0.12%          +12.27%       +157.9200   +157.3300
 Dollar/Swiss                 0.9151         0.9120      +0.35%          -1.02%        +0.9155     +0.9119
 Sterling/Dollar              $1.2158        $1.2213     -0.45%          +0.53%        +$1.2215    +$1.2154
 Dollar/Canadian              1.3520         1.3455      +0.48%          -0.22%        +1.3528     +1.3449
 Aussie/Dollar                $0.6393        $0.6423     -0.46%          -6.21%        +$0.6430    +$0.6388
 Euro/Swiss                   0.9668         0.9660      +0.08%          -2.29%        +0.9678     +0.9658
 Euro/Sterling                0.8689         0.8673      +0.18%          -1.75%        +0.8705     +0.8669
 NZ                           $0.5945        $0.5968     -0.40%          -6.39%        +$0.5973    +$0.5936
 Dollar/Dollar
 Dollar/Norway                10.8230        10.8010     +0.32%          +10.41%       +10.8650    +10.7870
 Euro/Norway                  11.4430        11.4419     +0.01%          +9.05%        +11.4930    +11.4136
 Dollar/Sweden                11.0282        11.0506     -0.47%          +5.96%        +11.1017    +10.9552
 Euro/Sweden                  11.6547        11.7097     -0.47%          +4.53%        +11.7525    +11.6213

 (Reporting by Karen Brettell; Additional reporting by Harry
Robertson in London; Editing by Alex Richardson and Daniel
Wallis)

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