Sterling stronger on interest rate possibilities

The Japanese yen weakened on Monday as a number of currencies hit long-term highs against the Japanese currency. The declines came as investors continued to sell the yen and invest in carry trades. The US dollar added 0.1 percent versus the yen to ¥123.61, a four-and-a-half year high. The euro added 0.3 percent against the yen to ¥165.87, a new record high. Sterling and the New Zealand dollar each gained 0.6 percent on the yen, to ¥245.13 and ¥93.19. Earlier in the session, sterling saw a 15-year high of ¥245.23. The Australian dollar reached a 16-year high versus the yen, at ¥104.35, before retreating to ¥104.12.

Meanwhile, sterling strengthened during the day on the likelihood of more interest rate hikes coming to the UK soon. The pound was 0.2 percent higher versus the euro to £0.6758, while it was up 0.3 percent against the US dollar to $1.9824. The euro also gained on the dollar, adding 0.1 percent to $1.3397.

It looked as if the Reserve Bank of New Zealand was again attempting to keep the value of its currency in check by selling off the kiwi, as it did last week. The tactic didn’t seem to work very well, however. While the kiwi dropped 0.7 percent in relation to the US dollar at one point, by midday in New York, the New Zealand currency was just 0.1 percent lower in relation to the greenback, to $0.7540.

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