Dollar doing well as US releases positive economic data

Published: 15 May at 9 AM Tags: Euro, Dollar,

The US dollar is continuing to do well against a basket of currencies and remains close to its highest level against the yen since October 2008. The strength of the greenback can be attributed to rising Treasury yields and signs that the US economy is firmly on the road to recovery.

The dollar was last trading at 102.24 yen, a slip of 0.1 per cent from Tuesday’s high of 102.48 yen. Falling oil prices are the main reason import prices in the US dropped in April. This means more spending power for households. If employment data is positive there is a good chance that the Federal Reserve will announce an early end to its monetary easing policy.

Pressure is likely to remain on the yen as the Bank of Japan continues with its own stringent monetary easing plans.

The euro appears to be steady at $1.2935 after hitting a five-week low earlier. Investors are watching the European Central Bank closely to see whether it will enter negative territory with its deposit rate.

However, the single currency has managed to hover near a three-year high against the yen. The euro hit 132.78 on Tuesday, but has since slipped 0.1 per cent to 132.11 yen.