The dollar rises to a 24-year high against the yen and a 37-year high against the British pound

The dollar hit a 24-year high against the yen and a 37-year high against the pound on Wednesday, as Japan’s monetary policy and Europe’s economic woes contrast with a relatively strong US economy and a Federal Reserve determined to cut inflation to its 2% target.

The US currency soared to 144.99 yen for the first time since August 1998. It is now one step away from its 1998 high of 147.43. The dollar was last up 0.9% at 144.09 yen.

Against the British pound, it hit $1.1407, the lowest since 1985, and was last down 0.1% at $1.1509.

“Increasingly, it’s becoming a growth story and really a crisis story. We have China continuing to have a zero COVID policy, and if anything, continuing to double down by locking down more cities,” said Erik Nelson, strategist macro, from Wells Fargo.

“Europe and the UK seem to be heading into a tough couple of months, with a recession very likely for both economies. The US, on the other hand, seems to hold on,” he added.

The euro fell below 99 cents on Wednesday, after falling as low as $0.9864 on Tuesday, its lowest since October 2002. The single European currency was last up 0.8% at $0.9985.

The European Central Bank is seen as likely to raise interest rates by 75 basis points (bps) on Thursday, but such expectations have done little to support the euro given the battered European economy and Russia’s decision to keep the euro closed indefinitely. major Nord Stream 1 gas pipeline.

By contrast, a report on Tuesday showed that the US service sector unexpectedly rebounded last month, reinforcing views that the economy is not in a recession.

At current dollar/yen levels, there is also speculation that Japan might intervene to prop up the currency.

Connect with the Voice of America! Subscribe to our channel Youtube and turn on notifications; Or, follow us on social networks: Facebook, Twitter and Instagram.