Dollar hits highest rate in 8 years against yen

Greenback advances to its highest value since 2007 against yen amid optimistic Federal Reserve officials’ outlook on early interest rate hike

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

A spike in the dollar on Tuesday was driven by the recent optimistic comments made by the Federal Reserve Vice Chairman Stanley Fischer and Federal Reserve Chair Janet Yellen, who both forecast an early US interest rate hike.

"I think it will be appropriate at some point this year to take the initial step to raise the federal-funds rate target and begin the process of normalising monetary policy," Yellen said at her highly anticipated speech on Friday

She also added that “it will be several years before the federal funds rate would be back to its normal, longer-run level."

Fischer emphasised the importance of favourable data rather than the date, stating that “if the [US] economy is growing very, very slowly we will wait. If the economy is growing faster we will do it quicker."

Conversely, the euro remained under pressure as Athens is still on the verge of a default.

Greece has warned creditors that if they do not reach a cash-for-reform deal soon, it will not be able to make a €305 million repayment to the International Monetary Fund (IMF) due on June 5.

The dollar was up 0.6 percent at 122.27 after hitting 122.365, its highest since July 2007.

The euro fell by 0.3 to $1.0944 after climbing to as high as $1.1468 in the last few days. 

TRTWorld and agencies