In world markets, the value of the dollar against a basket of currencies rose last week, mostly against the yen, as Prime Minister Sanae Takaichi’s government is expected to conduct a very supportive fiscal policy.
The dollar index, which shows the value of the US against the six most important world currencies, rose 0.4 percent last week to 98.93 points. At the same time, the dollar strengthened against the European currency by 0.3 percent, so the exchange rate of the euro slipped to 1.1625 dollars.
The American currency also strengthened against the Japanese one, by 1.5 percent, so the price of the dollar jumped to 152.85 yen. The weakening of the yen has continued since Tuesday, when Japan’s parliament endorsed Sanae Takaichi, the new leader of the Liberal Democratic Party, as the first female prime minister in the country’s history. Takaichi announced a very supportive fiscal policy, and it is believed that she will try to influence the central bank not to tighten monetary policy, despite high inflation.
All this has a positive effect on the stock market, so last week the Japanese Nikkei index reached a record level, but this has a negative effect on the Japanese currency. Support for the dollar was provided by the news about the easing of trade tensions between the USA and China, reports SEEbiz. The White House announced that next week US President Donald Trump will meet Chinese President Xi Jinping during his tour of Asia. This boosted investors’ hopes for an easing of trade tensions, and the pressure on the dollar eased.
But on Friday, the US currency lost some of its previous gains, after it was reported that consumer prices in the US rose by 0.3 percent on a monthly basis and 3 percent on a yearly basis in September. Although this is slightly higher inflation than a month ago, it is lower than analysts expected.
