Tom Westbrook

SINGAPORE, (Reuters) – The dollar saw its seventh consecutive week of gains against the yen and its highest one-week gain in over two years. Higher U.S. yields lifted the greenback.

China eases monetary policy while Japan holds its bond yields to zero. Meanwhile, overnight Federal Reserve Chairman Jerome Powell declared that an increase of 50 basis points in the rate was being considered for the next meeting.

Even though the comment was not in accordance with market expectations it drove five-year U.S. yields to above 3% in 2018 for the first ever time and unwound the euro’s bounce.

While the euro has been at its lowest level in two years, it is now just $1.0837 above its two-year-low. Markets are also starting to accept higher rates. German 2-year yields reached an eight-year peak overnight.

The week’s yen was down 1.6%. It last traded at 128.44 dollars, just above the Wednesday 20-year low of 129.43. It was at 100.61.

This week, the yuan fell below its 200-day moving mean and hit a new seven-month low at 6.4830 offshore trading early this session. [CNY/]

“The market (swaps), has priced in 146 base points of tightening to the next three Fed policy meetings,” Carol Kong (OTC:) from Commonwealth Bank of Australia.

She said that the dollar could be supported further by safe-haven demand today, should the April PMIs raise market concern about the global outlook for growth,” she explained. These are purchasing manager index numbers due in Europe as well as the United States.

Concerns about China’s economic instability and growth have held back oil price gains recently.

In morning trade, the Australian dollar was down 1%. It hovered around $0.7363 at its 50-day moving median of $0.7363. New Zealand’s dollar also fell 1% overnight, and was trading at $0.6723 Friday morning. [AUD/]

Shunichi Suzuki, Japan’s Finance Minister said Friday that the recent yen drops were “sharp.” His comment seemed to limit yen losses although he also stated that he did not voice concerns about them in a meeting with Janet Yellen, U.S. Treasury Secretary.

Japan’s core consumer price index rose in March at the fastest rate in over two years. This raises the possibility that Japan’s policymakers may try to strengthen the currency to help households who are being squeezed by rising energy costs and import food prices.

Sterling was at $1.3022 [GBP/]

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Exchange rate bid prices starting at 0051 GMT

Description: RIC U.S. Last Close Pct. Change YTD High Bid Low

Previous changes

Session

Euro/Dollar

$1.0834 $1.0831 +0.03% +0.00% +1.0842 +1.0833

Dollar/Yen

128.5400 128.2700 +0.19% +0.00% +128.5550 +128.3300

Euro/Yen

139.26 139.06 +0.14% +0.00% +139.3100 +139.0000

Dollar/Swiss

0.9544 0.9533 +0.13% +0.00% +0.9544 +0.9535

Sterling/Dollar

1.3019 1.3028 -0.05% +0.00% +1.3035 +1.3021

Dollar/Canadian

1.2598 1.2584 +0.13% +0.00% +1.2600 +1.2569

Aussie/Dollar

0.7357 0.7371 -0.19% +0.00% +0.7377 +0.7357

NZ

Dollar/Dollar 0.6719 0.6734 -0.20% +0.00% +0.6736 +0.6719

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