Thursday, May 2, 2024

Higher interest rates in the US make the dollar stronger

The Economist: The yen has been falling against the dollar because US interest rates are 5% points higher in the US than in Japan.  This increases the demand for dollars, as Japanese investors sell ¥to buy $ so the price of a dollar appreciates.

In the chart above, we see the price of a dollar (inverted scale) has risen to about ¥160.  

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