The price of the US dollar strengthened at the beginning of the year, as traders re-evaluated the amount of monetary easing that the Federal Reserve will undertake in 2024, and recorded an increase against the Japanese yen and other currencies in the G10.
The US currency exchange rate rose 1.2% against the Japanese yen on Wednesday, reaching its highest level in nearly two weeks at 143.73 yen. The value of the dollar rose against most currencies, while Treasury bonds and US stocks fell.
The dollar's momentum has been building so far in 2024, with the Bloomberg Dollar Index starting the new year with its best single-day performance since last March.
Investors are now looking forward to the release of minutes from the Federal Reserve's latest meeting, which may provide more clues on the future path of interest rates.
The US currency exchange rate rose by more than 4% in the period from early February to mid-March, and about 7% in the period from mid-July to early October, amid expectations that the Federal Reserve will tighten its monetary policy.
The rally from November 29 to December 11 was shallower and shorter-lived, with increasing bets on Fed rate cuts. However, the dollar index managed to rise 1.4% from trough to peak until its 200-day moving average put an end to potential gains.
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