Commodity News
HeadLine : Dollar hits 2-1/2-year high against yen as Fed tapering seen on track
Date : Oct 11 2021
The dollar ticked up to a 2-1/2-year high versus the yen on Monday after a soft U.S. payrolls figure did little to alter market expectations that the U.S. Federal Reserve will announce it will start tapering its massive bond-buying next month. The U.S. economy created the fewest jobs in nine months in September, with nonfarm payrolls increasing 194,000, way below economists’ forecast of 500,000. Still, data for August was revised up sharply while the jobless rate dropped to an 18-month low of 4.8% due to people leaving the labour force. Average hourly earnings also increased 0.6% from 0.4% in August. U.S. bond yields rose on the data, with the benchmark 10-year Treasuries yield hitting a four-month high of 1.617%, boosting the dollar’s yield attraction. The yen, known to be most sensitive to yield differentials, reacted by slipping to as low as 112.32 yen per dollar, a level last seen in April 2019. The dollar’s index stood at 94.09, not far from its one-year high of 94.504 touched earlier this month. The U.S. currency could gain further if U.S. consumer price data due on Wednesday shows an upswing in inflation and boost expectations of an earlier rate hike next year after tapering, analysts said. On the other hand, with supply disruptions and rising commodity prices affecting many other countries, concerns about inflation is not limited to the United States. 

Source: Reuters
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