Investors have been unsettled this week by rising expectations that the Fed will raise interest rates by more than forecast, sending the S&P 500 tumbling to confirm a bear market and intensified fears over the economic outlook.
The US Dollar Currency Index, which tracks its performance against six other major currencies, was up 0.3% at 105.42, after climbing as high as 105.46, its strongest since December 2002. “Today’s trade is a pretty classic pre-Fed calm, though I doubt it will last, with a hawkish Fed likely to provide the required catalyst for a further leg higher ,”Brown said.
“Intervention remains exceedingly unlikely, given that it would be unilateral in nature. … It would not necessarily stem the tide in terms of where the yen is going ultimately,” Corpay’s Schamotta said.