Hawkish Fedspeak keeps dollar king, yen slumps to 20-year low

THE dollar rose to a 2-decade peak against the yen and kept close to a 2-year high to the euro on Friday (Apr 15), as more hawkish comments from Federal Reserve officials reinforced expectations for faster US policy tightening.

The greenback was 0.43 per cent higher at 126.40 yen after earlier reaching 126.56 for the first time since May 2002.

The euro slipped 0.14 per cent to US$1.0812, heading back towards the overnight low of US$1.0785, a level unseen since April 2020.

New York Fed president John Williams said on Thursday that a half-point rate rise next month was "a very reasonable option", in a further sign that even more cautious policymakers are on board with faster monetary tightening.

By contrast, European Central Bank president Christine Lagarde said around the same time that there was no clear timeframe for when ECB rates would start to rise, adding that it could be weeks or even several months after the central bank winds down its stimulus scheme in the third quarter.

US Treasury yields resumed their climb overnight, following a 2-day decline, further buoying the greenback.

The dollar index rose 0.08 per cent to 100.48, edging back towards the 2-year high of 100.78 reached on Thursday.

For the week, the index has climbed 0.64 per cent, while the euro has dropped 0.58 per cent.

Against the yen, the dollar has climbed 1.71 per cent, heading for a sixth straight winning week.

Japanese Finance Minister Shunichi Suzuki warned on Tuesday that the government is watching yen moves and their impact on the economy "with a sense of urgency".

Meanwhile, the Australian dollar hovered near a 3-week low of US$0.7392 reached on Wednesday, last trading down 0.2 per cent on the day at US$0.7404. REUTERS