FALCON POWERS – The dollar recorded a strong performance on Wednesday, recovering some of the losses caused by renewed bets on the Federal Reserve’s interest rate cuts this year, while the yen declined for the third consecutive day, raising concerns among investors about the possibility of intervention by Tokyo.
In European markets, the Swedish currency came under pressure after the central bank cut interest rates, stating that it expects two additional cuts this year, while the British pound remained trapped in negative territory ahead of the Bank of England’s meeting on Thursday. Currently, markets are focused on the yen, which has declined for the third day, prompting Japanese officials to issue stronger warnings about the impact of the currency weakness on the economy.
Traders believe that the Japanese authorities have injected around $60 billion in recent days to support the currency after it reached its lowest level against the dollar in 34 years at around 160 yen.
Analysts say that any intervention by Tokyo will only support the yen temporarily due to the wide interest rate gap between the United States and Japan.
The dollar rose by 0.45% against the Japanese currency to 155.375 yen in the latest trading session, moving away from its lowest level recorded last week at 151.86 yen amid doubts about government intervention.
The dollar index, which measures the performance of the U.S. currency against a basket of six major currencies, rose by about 0.18% to 105.6, above the lowest level in a month recorded last week.
Central banks in Europe have already started cutting interest rates, including the Swiss National Bank, which made its decision in March prior to the Swedish central bank’s move on Wednesday. The euro fell by 0.12% to $1.074, while it rose by 0.6% against the Swedish currency to 11.752 krona.
The British pound declined by 0.3% to $1.2474.
In the world of cryptocurrencies, Bitcoin dropped by 1.2% to $62,225, heading for its fourth consecutive day of losses, marking the longest period of continuous decline since the beginning of the year. Ethereum also fell by 1.6% to below $3,000.
