USD Dominance Continues As Yen Attempts To Surpass

USD Dominance Continues As Yen Attempts To Surpass

Since bond yields have temporarily remained flat, the USD has continued to increase its gains following the Fed’s hawkish meeting. Today, the dollar’s post-FOMC surge continues to dominate the markets. The Yen, on the other hand, is catching up as US futures point to a lackluster start. The Japanese currency is also aided by selling commodity Yen crosses.

The concern now is whether the dollar will continue to outperform the Yen. Alternatively, if risk aversion grows, the Yen may eventually eclipse the dollar. The resistance level for the USD/JPY is now 110.95. There will be a decisive break there, resuming the greater advance from 102.58 and solidifying Dollar’s position as the winner. However, rejection by 110.95, followed by a violation of 109.79 support, implies that the USD/JPY is extending the consolidation from 110.95 with a new plunge. This could indicate a deeper selloff in Yen crosses due to risk aversion.

On Friday, June 18 at 03:30 GMT, the Bank of Japan (BoJ) will announce its Interest Rate Decision and the Monetary Policy Statement. “Main focus for the BoJ meeting is whether they extend COVID-19 aid for businesses past the current expiration date of September, with a high probability of such an announcement at this meeting.”

Despite Broad USD Strength, the USDJPY Slips Beneath 110.50

The USD/JPY maintained its gain after Wednesday’s jump, reaching 110.82, its highest level since early April. However, in the second part of the day, the pair reversed course and was last spotted at 110.30, down 0.25 percent for the day.

Despite the USD unrelenting resilience, a dramatic drop in US Treasury bond yields appears to be impacting on USD/JPY. The benchmark 10-year US T-bond yield is currently at 1.541 percent, down 2.3 percent on the day.

The greenback received a boost on Wednesday as the FOMC’s Summary of Projections showed a hawkish trend. The US Dollar Index (DXY) gained roughly 1% daily as the number of policymakers anticipating the fed funds rate to rise from zero in 2023 increased to 13 from seven in March. The DXY is currently trading at 91.77, up 0.42 percent for the day.

  • Broker
  • Benefits
  • Min Deposit
  • Score
  • Visit Broker
  • 20% welcome bonus of upto $10,000
  • Minimum deposit $100
  • Verify your account before the bonus is credited
$100 Min Deposit
9
  • The Lowest Trading Costs
  • 50% Welcome Bonus
  • Award-winning 24 Hour Support
$200 Min Deposit
9
  • Award-winning Cryptocurrency trading platform
  • 14 Cryptoassets available to invest in
  • FCA & Cysec regulated
$200 Min Deposit
9.8

Highly volatile unregulated investment products. No EU investor protection.

  • Over 100 different financial products
  • Invest from as little as $10
  • Same-day withdrawal is possible
$100 Min Deposit
9.8
  • Trade top Cryptos such as Bitcoin, Litecoin and Ethereum plus more
  • Zero commissions and no bank fees on transactions
  • Around the clock service with support in 14 languages
$100 Min Deposit
8.5
  • Award-winning Cryptocurrency trading platform
  • $100 minimum deposit,
  • FCA & Cysec regulated
$100 Min Deposit
9.8
Share with other traders!

Author : Azeez Mustapha

Avatar

Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.