Dollar falls as oil eases, yen rallies on Japan remarks
SPY•The dollar fell 0.34% as oil prices eased, while the yen rose 1.09% after Japan reaffirmed its shared stance with the United States behind July’s joint intervention. The dollar index was at 100.95, while markets priced a 66% chance of a Federal Reserve rate hike in October.
1. Dollar and euro moves
The dollar fell on Friday as crude prices dropped more than 1%, though it remained on track for a second straight weekly gain as expectations for higher interest rates supported it. The dollar index fell 0.34% to 100.95, its biggest daily drop in three weeks if sustained. The euro rose 0.2% to $1.1402 but was headed for a third consecutive weekly decline.
2. Yen rises on warnings
The yen strengthened 1.09% to 157.13 per dollar after Finance Minister Satsuki Katayama said President Donald Trump had raised concern about the yen’s weakness during a summit with Prime Minister Sanae Takaichi. Katayama said this reaffirmed the shared US-Japan stance behind July’s joint intervention, and that she and Treasury Secretary Scott Bessent would stay in close contact. The yen was still on track for a second weekly decline.
3. Rate expectations and data
Markets priced about a 66% chance of a Federal Reserve rate hike at its October meeting, up from 58% a week earlier. US orders for manufactured capital goods rose more than expected in August, while the University of Michigan’s Consumer Sentiment Index increased to 48.1 from 47.8.
