Dollar Tumbles To Lowest Since 1995 Versus Yen
The dollar dropped to its lowest since 1995 versus the yen Wednesday morning, as the Japanese currency remained favored by traders in search of a safe haven.
Concerns about the pace of the global recovery have intensified this week, as China showed signs of strain and the US Federal Reserve offered a gloomy assessment of the economy.
The Fed decided to keep its key interest rate near zero and its bond holdings steady to support the sluggish economy.
The dollar plunged to a 15-year low of 84.70 versus the yen, extending a dramatic downtrend. Only three months ago, the dollar was hovering in the mid-90′s against the yen.
The Japanese economic recovery is likely to proceed at a moderate pace, driven by strong growth in emerging economies, the Bank of Japan said on Wednesday.
Analysts predict that Japanese officials will step in at these levels in order to prevent the yen from appreciating further. Japan’s export driven economy benefits from a weaker yen.
The dollar was steady versus the euro, rising to 1.3000 in early dealing. With the advance, the buck stayed away from a 3-month low of 1.3333.
And the dollar reached an 11-day high of 1.5666 versus the sterling, staying away from a 6-month low of 1.5998.
The Bank of England cut its two-year ahead growth forecast for the U.K. economy to just over 3% from around 3.6% in its May report.
