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The dollar index rose to its highest level in 16 months and its strongest level in more than four years against the yen after the nomination of Federal Reserve Chairman Jerome Powell for a second term in office, which reinforced market expectations of higher US interest rates in 2022.
The exchange markets have been strongly affected in recent months by market expectations of the extent of the various steps by which central banks in the world will reduce the incentives provided during the Corona pandemic period and raise interest rates.
The dollar index, which measures the performance of the US currency against a basket of six competing currencies, was at 96.426 at 0819 GMT on Tuesday, slightly lower than its 16-month high hit during Asian trading hours at 96.603.
The dollar rose against the Japanese yen to its highest level in four and a half years as investors expected US interest rates to diverge from those in Japan.
The dollar’s movement against the yen fell at the time of writing, with a 0.2 percent drop to 114,590 yen, compared to the highest level reached earlier in the session when it recorded 115.160 yen.
The euro rose 0.2 percent against the dollar at 1.1258 dollars after hitting its lowest level in 16 months against the US currency.
The Turkish lira fell to a new record 12 against the dollar after President Recep Tayyip Erdogan defended recent interest rate cuts and vowed to win what he described as his “economic war of independence.”
The Australian dollar fell 0.1 percent to $0.7217, while the New Zealand dollar fell 0.3 percent to $0.6931.
The Reserve Bank of New Zealand is expected to raise interest rates by 25 basis points on Wednesday.
Bitcoin fell below 56 thousand dollars. However, earlier this month, Bitcoin reached an all-time high of $69,000.
