Yen, US dollar strengthen; Australian dollar gains on both

Yen, US dollar strengthen; Australian dollar gains on both

Story link: Yen, US dollar strengthen; Australian dollar gains on both

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The US dollar and the Japanese yen strengthened during the week amid a rash of central bank decisions on interest but the Australian dollar gained on both on news that retail sales were up and unemployment down increased the likelihood that the Reserve Bank of Australia will raise interest rates soon. The Australian currency added 1.1 percent over the week to ¥99.70 versus the yen and gained 1.2 percent to $08320 on its US counterpart.

The US Federal Reserve held interest rates at 5.25 percent on Wednesday and warned that it was still concerned about inflation. Meanwhile, on Thursday the European Central Bank held rates steady in the Eurozone but the Bank of England raised rates there to 5.5 percent. All this activity resulted in a greenback that added 0.5 percent to $1.9830 versus sterling and gained 0.6 percent to $1.3520 against the euro during the week.

The dollar fell in relation to the yen, however, as did both the euro and sterling. The Japanese currency gained 0.2 percent versus the US currency to ¥119.90, while it added 0.5 percent to ¥238 against sterling and was up 0.6 percent to ¥162.30 in relation to the euro. The Japanese currency was helped by a drop in selling of the yen to finance carry trades as investors avoided unnecessary risks.