The yen fell to the ¥155 level against the dollar in the New York market. Expectations for a rate hike at the U.S. Federal Reserve’s Federal Open Market Committee (FOMC) meeting later this week strengthened, prompting broad-based dollar buying.
In the New York market on the 15th, expectations of a widening U.S.-Japan interest rate differential prompted dollar buying and yen selling, sending the yen down to the ¥155 level against the dollar. The yen briefly recovered to ¥154.83 in the morning, but gains in crude oil futures and elevated U.S. long-term interest rates supported the dollar. The exchange rate ultimately rose to ¥155.21 by the close.
The New York Fed’s September Empire State Manufacturing Survey fell sharply to 7.6 on the headline index, from 20.6 the previous month. Although the result was below the market forecast of 15.0, indicating a weakening business climate, expectations of a recovery in crude oil prices and a widening U.S.-Japan interest rate differential continued to support the dollar.
The euro-dollar exchange rate ranged from $1.1536 to $1.1552, while the euro-yen exchange rate moved between ¥178.68 and ¥179.12. The dollar was generally firm against major currencies, with sterling-dollar at $1.3470–$1.3496 and dollar-Swiss franc at CHF0.8179–CHF0.8199.
ADP’s four-week average employment figure increased, while the New York State Empire Manufacturing Index deteriorated rapidly. Market participants increasingly priced in a rate hike at the FOMC meeting, and the view that the dollar’s downside would be limited gained ground. Trends in crude oil prices and long-term interest rates will be key factors for the dollar going forward.