Yen rallies as dollar wobbles toward Fed meeting
SPY•The yen rose 0.6% to 157.3 per dollar as the dollar weakened ahead of next week’s central bank meetings. The Canadian dollar reached a one-month high of C$1.4031, while markets expected rate holds from the Fed, ECB and BOJ and hikes from the Bank of Canada and RBNZ.
1. Yen gains as dollar retreats
The yen climbed through its 50-day moving average to 157.3 per dollar on Thursday, rising 0.6% as investors pared dollar positions ahead of next week’s central bank meetings. The dollar’s recent weakness followed wobbles in AI-related debt and stocks, which had dented confidence in the US economy and interest rates staying higher for longer.
2. Rate decisions in focus
The Canadian dollar reached a one-month high of C$1.4031 per dollar, with a Bank of Canada rate hike expected next week. Markets expected the Federal Reserve to hold its 3.75%-4% rate range in October and hike in December; the ECB was expected to hold at 2.5%, while the BOJ was expected to hold, with a hike to 1.5% anticipated early next year. A New Zealand rate hike was also expected next week.
