SINGAPORE, April 29 ― The dollar held firm at a 20-year high today and was poised to score its best monthly gain in a decade, buoyed by bets on rising US interest rates and doubts about growth in Europe and China.
“Even though the BoJ had shown no sign of baulking on its commitment to its yield curve control policy, the market clearly still harboured suspicions that it might,” said Rabobank strategist Jane Foley. Weaker-than-expected quarterly US growth data overnight proved little obstacle to the dollar's rise, and investors hardly adjusted their near-term interest rate bets.
“Market participants increasingly price in a widening divergence opening up between the performance of the euro-zone and US economies and subsequently the outlook for European Central Bank and Fed policies.” Similar fears have driven sterling to the 22-month low of US$1.2412 it made overnight. At US$1.2481 in Asia, the British currency is down 5 per cent against the dollar in April, its worst showing since October 2016.