Interest rate hikes bet that the U.S. dollar will fall, but it will rise to a one-month high against the yen. Investing.com

© Reuters.

Gina Lee

Investing.com-The dollar fell in early Asian trade on Tuesday, but the exchange rate against the yen climbed to its highest level in more than a month. As investors bet that the Fed will raise interest rates early, the overnight rise in U.S. Treasury yields also gave the dollar a slight boost.

As of 8:52 pm Eastern Time (1:52 am GMT), tracking the dollar’s exchange rate against a basket of other currencies fell 0.04% to 96.180.

The currency pair rose slightly by 0.09% to 115.43.

The currency pair rose slightly by 0.13% to 0.7200, and the Australian dollar against the US dollar was close to the nearly two-week low of US$0.7184 hit in the previous trading day. The currency pair rose slightly by 0.07% to 0.6789.

The currency pair rose 0.32% to 6.3727. Data released earlier in the day showed that 50.9 in December was better than expected.

The currency pair rose slightly by 0.07% to 1.3481. The pound has remained flat since Monday and fell to a low of $1.3431 for the first time since November 29.

The Japanese, Chinese and Australian markets all reopened after the holidays.

USD/JPY rose to 115.395 yen for the first time since November 25, aided by the 12.5 basis points of US long-term Treasury bond yields that surged overnight, hitting 1.6420% for the first time since November 24.

Investors also continue to bet that the Fed will raise interest rates in 2022, and the money market has completely digested the first rate hike before May and the two rate hikes before the end of 2022.

Barclays senior foreign exchange strategist Shinichiro Kadoda told Reuters: “The market has digested the more aggressive interest rate hike scenario in the United States in 2022, or at least the risks involved. This must still be the key support for the dollar.”

Due to the omicron variant, the number of COVID-19 cases worldwide also continues to surge. Global travel and public services continue to be postponed, and the surge may also delay the reopening of some American schools after the holidays.

However, investors still hope that the blockade can be avoided.At the same time, the U.S. Food and Drug Administration approved the third dose on Monday Pfizer Inc. (NYSE:)/ BioNTech SE (F:) COVID-19 vaccine for children 12-15 years old. The regulatory agency also shortened the time for all booster injections from six months after the initial injection to five months.

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