The U.S. dollar is weak against the euro in trading on Friday, stable against the pound and getting cheaper against the yen.
The calculated ICE index, which shows the dollar’s movement against six currencies (euro, Swiss franc, yen, Canadian dollar, pound sterling and Swedish krona), is adding 0.14% in trading, while the broader WSJ Dollar Index is stable.
The ICE Dollar Index, which rose in September to its highest level in 20 years, has since declined 10%. Nevertheless, the index ends 2022 up more than 8%.
As of 8:05 a.m. Ksk on Friday, the euro/dollar pair was trading at $1.0650 compared to $1.0664 at the close of the previous session. The exchange rate of the pound to the dollar is $1.2050 against $1.2055 the day before.
The value of the U.S. currency in a pair with the yen dropped to 132.55 yen, compared to 133.03 yen in previous trading.
The Bank of Japan continues unscheduled redemption of government bonds on Friday for the third consecutive day in an effort to curb the growth of bond yields, Bloomberg reported. This month the volume of redemption of government bonds by the Japanese Central Bank has reached a record level of 17 trillion yen ($128 billion).
The Bank of Japan unexpectedly expanded the boundaries of the corridor of permissible fluctuations in yields of ten-year government bonds at the December meeting that was perceived by the market as a step towards easing its policy.
“We believe that the Japanese Central Bank is experiencing difficulties with its policy of yield control and in the end it will have to abandon it – this is a key factor in strengthening the yen,” notes Rodrigo Catherill, a currency market analyst at National Australia Bank Ltd. in Sydney.
The expert expects the dollar to yen to 120 yen in 2023.
EURO, pound, U.S. dollar, yen
