May 2, 2023
U.S. dollar remained firm on Monday. How is yen trading?
On Monday, the U.S. dollar remained firm against most major currencies, including the euro and the British pound. However, the Japanese yen was trading slightly higher against the greenback.
The U.S. dollar index, which measures the value of the dollar against a basket of six major currencies, was up 0.1% at 92.22. The index has been hovering around the 92 level for the past few weeks, as investors await the outcome of the Federal Reserve's policy meeting later this week.
The Fed is widely expected to keep interest rates unchanged at near-zero levels and maintain its bond-buying program, but investors will be closely watching for any hints about the central bank's plans to taper its asset purchases in the coming months.
Meanwhile, the Japanese yen was trading at around 109.80 per dollar, up 0.1% from Friday's close. The yen has been range-bound against the dollar in recent weeks, as investors weigh the impact of the country's slow vaccine rollout and the possibility of a snap election.
Japan's Prime Minister Yoshihide Suga is reportedly considering calling a general election in October, ahead of the end of his term as leader of the ruling Liberal Democratic Party in September. The move could help him secure a fresh mandate and boost his chances of pushing through economic reforms.
However, some analysts have warned that a snap election could also create uncertainty and volatility in the markets, particularly if the opposition party gains ground.
Overall, the U.S. dollar remains the dominant currency in the global markets, supported by the country's strong economic recovery and the Fed's accommodative policies. However, the yen could see some volatility in the coming weeks, depending on the outcome of Japan's political developments and the global risk sentiment.