Dollar Drifts Despite Fed Hike Bets; Yen Hits Six-Month High — SkimNews
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- The dollar fell 0.07% to 99.09 against a basket of currencies, near its recent low of 98.558, even as traders priced in a roughly 57% chance of a Federal Reserve rate hike this month after August's strong nonfarm payrolls report.
- The yen climbed more than 0.2% to 155.88 per dollar toward a six-month high, extending a 2%+ surge last week driven by carry-trade unwinding and expectations of capital repatriation.
- The Bank of Japan is seen raising rates 25 basis points at its September 18 meeting, with futures pricing a 75% implied probability and a 60% chance of another move by December, according to Japanese Prime Minister Sanae Takaichi's economic adviser.
- The European Central Bank is expected to lift rates to 2.75% on Thursday, with futures implying a 75% chance of another hike to 3.0% by December as still-elevated oil prices feed global inflationary pressures.
- Standard Chartered global head of research Eric Robertsen called the yen's recent strength a "potential threat to carry outperformance," warning a persistent JPY move could signal a shift in asset allocation.
- Bitcoin held above $80,000, last at $80,145.95, drawing support as investors diversified away from the dollar.
Why it matters: With the Fed, ECB, and BOJ all expected to hike within the same window, global tightening is happening in lockstep rather than as a divergence play — which is why the dollar fails to benefit from hawkish Fed pricing. The yen's 2% weekly surge and Standard Chartered's carry-trade warning signal a possible regime shift in cross-asset positioning.
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