USD/JPY sits near monthly highs on firmly bid US dollar
25.04.2022, 02:38

USD/JPY sits near monthly highs on firmly bid US dollar

  • USD/JPY bulls hold the fort near monthly highs. 
  • US dollar firms in the open for the last week of trade in April ahead of Fed May meeting. 

At 128.40, USD/JPY holds near monthly highs as the US dollar picks up a bid at the start of the week despite the positive euro and market-friendly outcome of the French elections. DXY is 0.12% higher trading near the highs of the day at 101.277. 

The single currency gained a touch in early Asian markets on Monday following French President Emmanuel Macron's comfortable Sunday defeat of far-right rival Marine Le Pen. Nevertheless, the focus is elsewhere and there were no surprises in the victory, so the euro lost its initial bid which has triggered flows into the greenback. 

Markets are looking ahead to the Federal Reserve meeting at the start of next month as April begins to draw to a close. The Fed chairman Jerome Powell in his testimony at the International Monetary Fund (IMF) meeting last Thursday mentioned that a 50 basis point (bps) interest rate hike on the cards helped to bolster demand for the greenback. 

Powell reported that multi-decade high inflation in the US economy is demanding a quick pace for interest rate elevation, which states that investors should brace for more than one 50 bps rate hike announcement by the Fed this year. It even drove some analysts at major banks to forecast rate increases as high as 75bps. Nomura Holdings Inc. now expects the Fed to lift interest rates by 75 basis points at both its June and July meetings, moves that would follow up on an expected 50 basis point hike in May.

 

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