The US dollar started the last quarter of the year in a strong position due to expectations of higher US interest rates, while the Japanese yen slid to a nearly one-year low. This has raised concerns among traders of a potential intervention by Japanese authorities to support the currency. The yen weakened to 149.83 per dollar, coming closer to the 150 mark that could trigger action from Japan, similar to what occurred last year. However, experts suggest that the Ministry of Finance is unlikely to establish a clear line in the sand, and the Bank of Japan is expected to resist pressure to implement a hawkish overhaul.
The euro and sterling also experienced losses, with the euro falling by 0.06% and sterling dropping by 0.14% against the dollar. The US dollar index remained near its recent 10-month high, indicating strong performance. The US Congress passed a stopgap funding bill to prevent a government shutdown, which is expected to be positive for risky assets. Additionally, the release of nonfarm payrolls data this Friday and the US CPI report on October 12 are back on schedule due to the avoidance of a government shutdown. This increases the likelihood of a further rate hike at the November FOMC meeting.
In other currency news, the Australian dollar and New Zealand dollar both depreciated against the US dollar. Traders are anticipating rate decisions from their respective central banks later this week.
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