The U.S. dollar hit a nine-month high against the Japanese yen. It also strengthened within its index, which measures the value of the dollar against a basket of six world currencies.
Behind the rise in the value of the US dollar are concerns about accelerating inflation, and good news from the US labour market supported by the approval of the 1.9 fiscal stimulus package a trillion dollars. Should inflation maintain the onset trend and get above the two percent level in the near term, it would likely lead the Federal Reserve to consider increasing its basic interest rates.
The dollar is acting as a magnet for investors now. Indeed, labour market data showed that more than twice as many jobs were created in the US in February than expected. This is a fairly strong indicator that the economy is reviving more significantly. Europe is still failing to bring the epidemic under control more significantly, so it will unlock its economy apparently with several months behind the United States. Another reason to put the dollar over the euro now.
Although Japan’s economy appears to be from the worst outside, this is not enough momentum for investors to maintain their yen positions. The Japanese currency thus came to its weakest level against the dollar in nine months.