The US dollar moved higher after driving the yen to a 10-month low, while the euro and sterling remained near three-month low as investors bet on a still-resilient US economy.
The US dollar advanced 0.05% to 104.91 against a basket of currencies that included the euro and sterling, retaining some of its gains from the previous session after reaching a six-month high as the US services sector unexpectedly picked up steam in August.
In early Asian trade, the dollar reached a new high of 147.875 yen (JPY = EBS), its best since November.
The Federal Reserve report known as the “Beige Book,” which was released on Wednesday, revealed that economic growth in the United States has been modest in recent weeks, job growth has been subdued, and inflation has slowed in most parts of the country.
According to the CME FedWatch tool, market pricing indicates that the Fed will raise interest rates again in November, despite policymakers’ expectations to leave rates on hold later this month.
A lower-than-expected drop in China’s exports and imports in August did nothing to brighten investors’ emotions, as they continue to be on the lookout for additional assistance measures from Beijing to strengthen the economy and restore market confidence.
Traders in Japan remained on high alert as the frail yen failed to gain ground against the strong dollar, even as policymakers increased their warnings about a currency sell-off.
The yen JPY=EBS rose 0.2% to 147.45 per dollar.
