Home Forex Market News Dollar gains on Fed policy change hopes, pound rallies on Scottish poll

Dollar gains on Fed policy change hopes, pound rallies on Scottish poll

The US dollar was strong ahead of the retail sales report expected later today and ahead of next week’s Federal Reserve meeting.

The dollar was especially strong against the Japanese yen, hitting a 6-year high as Bank of Japan Governor Haruhiko Kuroda said to the Prime Minister that the bank was ready to take action in order to hit its 2% inflation target.  The dollar traded north of 107 at 107.22, after breaking to a new 6-year high of 107.39.  The dollar’s gains have come with impressive speed after the BoJ Governor suggested the previous week that the yen could fall further against the US dollar without causing disruptions to the Japanese economy.

The euro on the other hand was relatively more resilient against the dollar, as it traded at 1.2930.  The pound rebounded above 1.62 to trade as high as 1.6266 the previous session after a Yougov poll showed a 4-point lead to the ‘No’ campaign in Scotland’s referendum.  The pound was trading at 1.6231 at the close of the Asian session.

The currencies of New Zealand and Australia were under significant pressure as well.  The aussie made a 6-month low below 91 cents at 0.9060 against the US dollar, while the Kiwi traded at a 7-month low of 0.8157.  So overall another day of broad dollar strength – with the exception of the European currencies – which also shows how dangerous it is to try to call a top in this dollar rally.

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