During today's Asian trading, the US dollar consolidated against major currencies after yesterday's moderate decline.
The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) rose by 0.05% to 111.38. However, the index remains near the 20-year high reached yesterday at 111.81. The dollar is supported by both expectations of further tightening of policy by the Federal Reserve System (Fed) and a general increase in demand for safe haven assets amid rising geopolitical tensions and fears of a global recession.
The yen was almost unchanged against the US dollar after it rose by 1.2% yesterday amid Japanese interventions in the foreign exchange market. Tokyo has intervened to support the yen for the first time since 1998.
Further currency interventions are likely to keep the USD/JPY below 145 yen per $1, experts at Capital Economics say.
The divergence of the rates of the central banks of the United States and Japan will decrease over time, but in the near future this factor will continue to put pressure on the yen, analysts at Capital Economics said.