The Australian dollar in different denominations.
Brendon Thorne | Bloomberg | Getty Images
The Australian dollar rose and the Japanese yen continued to fall on Wednesday as markets turned more positive on riskier assets and high commodity prices boosted developments.
The Australian dollar hit its highest level since December 2015 against the yen, after gaining 8% in March so far.
Against the dollar, the Australian dollar hit a four-and-a-half-month high of $0.7477 in early trading, after gaining 0.95% overnight, while the yen slipped as low as 121, 4 to the dollar after the dollar climbed 1.1% against the Japanese dollar. overnight currency.
The breakout of Aussie resistance at $0.745 was driven by gains in equities and commodities, ANZ analysts said, adding that “global risk sentiment continues to drive the outlook for the AUD.
European and US stock markets rallied on Wednesday as, aside from commodities, investors shrugged off concerns about the market and the economic impact of war in Ukraine.
High commodity prices are bad news for the yen, however, as Japan imports most of its energy, widening the country’s trade deficit.
“USD-JPY has no choice but to rise,” said TD Securities analysts, who pointed to the US-Japanese rate spread and the yen’s vulnerability to the ongoing shock to raw materials.
The yield on 10-year U.S. benchmark yields rose to 2.4026% in the early hours of Asia on Wednesday, still buoyed by a speech by U.S. Federal Reserve Chairman Jerome Powell on Monday, which opened the door to an increase in interest rates of more than 25 basis points at the next political meetings in order to fight against inflation.
“A number of other Fed speakers are jumping on the bandwagon of Chairman Powell’s aggressive ride,” ING analysts said. Powell himself is set to speak again later today in a busy week for public remarks from Fed policy scorers.
However, rising US yields had little effect on the dollar, as investors say much of the increase is already in price.
The dollar index, which measures the greenback against six major peers, was at 98.456, with the euro little changed at $1.1022.
The pound hit its highest level of $1.3279 against the dollar in nearly three weeks as attention turns to UK inflation data and the UK minister’s spring statement of Finance Rishi Sunak, both due later Wednesday.
In the cryptocurrency markets, bitcoin was around $42,400, holding onto its overnight gains, and ether was just under $3,000.