By Alun John

HONG KONG (Reuters – The dollar rose to 101 Tuesday after it set a new 20-year high on yen. On Tuesday, the greenback also reached a 2-year peak on euro. Supported by strong U.S. Treasury yields, and high expectations for good economic data, the greenback soared past 101.

After rising as high as 101.02 during early trade, the dollar index (which measures the greenback in relation to six peers) was up 0.2% at last check. This month, it has gained 2.6%.

Carol Kong (OTC): FX strategist, Commonwealth Bank of Australia.

Elle also stated that she was analyzing purchasing manager index data, which were due to be published in several markets Friday.

“If there is a weak PMI in the Euro zone, or anywhere else, the markets might downgrade their expectations of the global economy. But I don’t believe the U.S. PMI number will be particularly low, so we’ll probably see some contrast.

Surging U.S. bond yields are the main driver of dollar-yen.”

Most strikingly, the dollar has gained against the Japanese currency. It rose 0.7% to 127.88yen on Tuesday, the highest since May 2002.

The yen has increased 4.5% so far in this month. This would mark its second largest monthly percentage increase since 2016, behind the 5.8% last month.

On Tuesday the benchmark hovered at 2.8376, just shy of its three-year high of 2.0844%. Meanwhile, Bank of Japan has intervened in order to preserve the yield of Japanese government 10-year bonds around 0%.

Investors are betting that the yen will continue to fall. According to the latest CFTC data, net short yen positions were at their highest level in over three years.

Shunichi Suzuki, Japan’s Finance Minister, stated Tuesday that the economic damage from weakening the yen is more than its benefits. This was the strongest warning yet against recent currency slumps.

The dollar reached a record high of 0.9466 Swiss Francs. This was its highest level in one year and also tested peaks against majors.

At $1.0776 the euro fell to $1.0756 last week. Sterling was also at $1.3009 last week, near its $1.2973 dollar low (18 months ago).

European currencies were not helped by recent fighting in Ukraine. Russia claimed that they had begun an anti-Russian offensive in the eastern part of Ukraine.

Australian dollars rose 0.3% to $0.737 from Monday’s low of $1.30 on Monday. This was supported by Tuesday’s minutes from the Reserve Bank of Australia’s April meeting. These minutes suggested that the central bank is closer to increasing interest rates due to rising inflation.

It also found its feet again, with Tuesday’s trades at $40,800, after hitting a Monday low of $38,547.