Dollar strengthens on U.S. interest rate outlook
The dollar strengthened on Tuesday as the prospect of higher U.S. interest rates in the longer term remained top of mind for investors, leaving other currencies struggling near record lows.
In a holiday-constrained week, trading volumes are likely to be thin ahead of the end of the year.
The lack of major economic data also means the interest rate theme is likely to remain the main driver of moves in the foreign exchange market.
The yen languished near a five-month low and last stood at 157.19 per dollar, having fallen 4.7% this month to territory that has traders wary of any intervention by Japanese authorities.
The Bank of Japan (BOJ) left interest rates unchanged last week and did not say when it would raise rates next, a stark contrast to the Federal Reserve’s hawkish tone the day before, when it projected a measured pace of rate cuts by 2025.
That sent the yen tumbling, with the Japanese currency struggling to recoup its losses.
Source: Investing.com
