Dollar Faces Pressure Amid Speculation of FX Intervention
The US dollar weakened against major currencies on Monday, following a turbulent week of policymaking that has left investors uncertain. Speculation regarding a possible coordinated foreign-exchange intervention by the US and Japan has further heightened concerns about the dollar’s stability as the world’s reserve currency.
Yen Gains Ground as Intervention Talks Intensify
During Asian trading, the Japanese yen rallied by 1% against the US dollar, igniting discussions that Japanese authorities might be preparing to intervene in the forex market. Bloomberg reported a drop of 0.4% in its gauge of the dollar, extending a significant 1.6% loss from the previous week. The possibility of US support for a stronger yen has analysts revisiting the concept of coordinated currency intervention to bring down the dollar’s value against its key trading partners.
Gold Surpasses $5,000 Amid Geopolitical Uncertainty
In a related trend, gold prices surged past $5,000 per ounce, as global investors began to shy away from fiat currencies due to prevailing geopolitical risks. The heightened attraction for gold underscores a broader move among investors seeking safer assets during uncertain times. This sentiment has also played a role in the upward movement of several Asian currencies, including the Singapore dollar and the Malaysian ringgit, both seeing their strongest performances in recent years against the greenback.