The US dollar reached a 16-month high and the strongest level in more than four years against the yen after Joe Biden’s decision to nominate Jerome Powell for a second term as head of the Federal Reserve, boosting market expectations that US interest rates will increase in 2022.
The dollar hit a 16-month high of 96,603 on Asian stock exchanges and fell slightly to 96,426 thereafter.
Against the Japanese yen, the dollar has risen to its highest level in four and a half years. The yen is at 114.59 per dollar, while earlier it was at 115.16 per dollar.
At the same time, the euro is strengthening to $ 1.1459.
“The decision (of Joe Biden) reduces the climate of uncertainty for the markets and signals that the Fed will continue its monetary policy along the same lines,” MUFG analyst Lee Hardman said in a note.
The head of Commerzbank for foreign exchange and commodities, Ulrich Leuchtmann, said the US president’s decision was beneficial for the dollar because it “shows that Biden respects the independence of the US Federal Reserve”.
“Biden has shown that he has principles,” he said in a statement.
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