The U.S. dollar has risen to the highest level in 20 years against major currencies, supported by expectations of tightening monetary policy from the Federal Reserve and following Russian President Vladimir Putin's order for the first mobilization in the country since World War II. The dollar index, which measures the performance of the U.S. currency against a basket of six major currencies, including the euro, pound, and yen, climbed to 111.79 for the first time since mid-2002.
The dollar also reached a 24-year peak, surpassing 145 yen, after the Bank of Japan maintained its very low interest rates and adopted accommodative monetary policy guidance. Additionally, the dollar hit new highs against the New Zealand and Australian dollars and rose against the Chinese yuan in offshore trading and the South Korean won.
U.S. Federal Reserve forecasts indicate that interest rates will rise to 4.6% next year, with no cuts expected until 2024. The interest rate was raised by another 75 basis points to a range between 3.00% and 3.25%, as widely anticipated. The dollar reached 145.405 yen but experienced sharp fluctuations following the Bank of Japan's announcement, recording in the latest trading a rise of 0.31% to 144.53 yen.
The British pound fell to its lowest level in 37 years at 1.1221 dollars and was last traded down 0.26% at 1.1240 dollars. The euro declined to its lowest level in 20 years at 0.9807 dollars before trading down 0.18% at 0.9820 dollars. The Australian dollar decreased by 0.6% to 0.6593 dollars after touching 0.6583 dollars, its lowest point since 2020.
