The US dollar dominates the world forex markets. Holding the British pound near 35-year lows, the Japanese yen is at its lowest level in a quarter century. Only the Swiss franc holds a step with the dollar.
Higher estimate on interest rate hikes
Following the release of data on the development of August inflation in the US, financial markets’ bets for a stronger interest rate hike by the US central bank rose than expected to date. Analysts now estimate the Fed will raise rates by between 0.75 and 1 percentage point next week.
Dollar gets stronger due to Japanese yen
As a result, the US dollar began to get stronger, especially against the Japanese yen. That one rose to the dollar to its lowest level in 24 years. It also weakened slightly the euro, which again began to approach parity to the dollar, even though it appeared to have definitively detached itself from it in the past days. Also holding on weak readings is the British pound, which is at 35-year lows against the dollar.
The only currency keeping pace with the dollar is the Swiss franc. The latter has fallen to the strongest readings to the euro since 2015, when the Swiss National Bank abolished the franc artificial weakening scheme. Where Fed rates will move will be clear on Wednesday, September 22.
