USD gains on yen

Story link: USD gains on yen

Interest rate speculation sent the dollar higher versus the yen Wednesday as investors continued to bet that the Federal Reserve will increase US interest rates later this year and after the minutes of the most recent meeting of the Bank of Japan indicated that it will likely continue to hold interest rates at their current level of 0.5 percent.

Futures in Chicago on the Chicago Board of Trade are indicating a virtual certainty that US interest rates will go up at least a quarter of a percentage point by the end of the year, although chances for a rate hike in the US before that are seen as low.

In late morning trade in New York, the yen traded at ¥107.9900 to the US dollar while it was at ¥167.4547 in relation to the euro, fell to ¥10.498 against the Mexican peso and fell to a 9-year low versus the Brazilian real at ¥66.926 to the South American currency.

The greenback, meanwhile, traded at $1.5506 to the euro on expectations of a rate hike by the European Central Bank, possibly as soon as July.

The pound weakened versus the dollar and the euro after the minutes of the most recent meeting of the Bank of England indicated little chance that it will issue an interest rate hike anytime soon.

At shortly before noon in New York, it took $1.9573 to buy a pound while the UK currency traded at 79.22p to the euro.

The Australian and New Zealand dollars strengthened, but indications that the Australian economy could be slowing and a decline in jobs there in May limited gains for the Aussie.

It took 94.42 cents US to buy an Australian dollar, while a New Zealand dollar was worth 75.66 cents US.