By: Barbara Zigah
The U.S. Dollar continues to be on the defensive in Tokyo trading today, remaining poised near its lowest price this year. As reported at 2:48 p.m. (JST) in Tokyo, the U.S. Dollar Index, which estimates the U.S. currency’s performance against a group of major currencies, traded at 76.927 .DXY, a loss of .2%; in yesterday’s trading, it had dropped to the lowest price in nearly a full year, 76.803 .DXY. Investors are confident that a global economic recovery is imminent, and have turned to higher-risk, higher-yielding commodity-based currencies in an effort to turn a profit. As a result, currencies that are traditionally low yielding, i.e. the U.S. Dollar and the Japanese Yen to a lesser extent, have suffered as a result.
One trader at a bank in Japan commented that hedge funding and speculating were playing a crucial role in the weakness of the U.S. Dollar. He further suggested that there’s a possibility that the Japanese Yen may be replaced by the greenback for carry trade funding, though only time will tell. Currently, both the U.S. and Japanese central banks have near zero lending rates, and even the interbank rates have declined with 3-month U.S. Dollar Libor priced at 0.299% yesterday while the 3-month Japanese Yen Libor priced slightly higher at 0.37%. In individual currency trading, the U.S. Dollar managed to hold at 92.04 Yen, a slight increase from yesterday’s 91.61 Yen, a 7-month low on the EBS trading platform.
U.S. Dollar Holding Near 1-year Low
Barbara Zigah
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About Barbara Zigah
After working on Wall Street, Barb began her second career as a freelance writer at Daily Forex, where the CEO recognized fresh, untapped potential and was willing to give her a try. She’s never looked back. Since then, she’s worked steadily as a freelance writer and editor in the financial services and Forex-related industry.