The greenback continued to leverage support from US inflation data to continue to strengthen in the European session by rising to its most recent 24 -year high against the yen.
The US inflation shock of 9.1% in June has further strengthened market confidence for the Federal Reserve (Fed) to act more ‘decisively’ in tightening its monetary policy.
Most recently, Fed policymaker Mary Daly told that the central bank may have the option of a 100 basis points increase in interest rates this month, although a 75 basis point increase is seen as more likely to be implemented.
This in turn plunges the yen which is already known to adopt a very loose policy. The yen sank to its first low of 139.00 since September 1998 against the greenback.
Investors ’focus is now shifting to the publication of producer price index (PPI) data and US unemployment claims in the New York session.
The Bank of Canada (BOC) unexpectedly took drastic action by raising the rate by 100 basis points at its policy meeting on Wednesday.
The Canadian dollar initially gained gains following the decision, but failed to sustain it by rebounding against the USD in today's trading session.
Meanwhile, the Aussie dollar was supported by a strengthening in the job market after the Australian unemployment rate reportedly continued to fall to a 48 -year low in June, of 3.5%. However, the gains were slightly limited due to the stronger US dollar.
The euro continued to hover around parity against the US dollar, seeing it trade at 1.0020, while the pound weakened to a more than two -year low against the USD.
