Dollar hits 1-year high as Fed hike bets build, yen nears 1986 low
What's new: Futures imply an 85% chance of a quarter-point Fed hike by September, while Japan weighs possible currency intervention.
The US dollar climbed to its strongest level in more than a year on Tuesday as traders bet the Federal Reserve will keep tightening policy, while the yen hovered near its weakest point since 1986. The dollar index rose to 101.25, its highest since May 2025. Fed funds futures priced in better than an 85% chance of a quarter-point rate increase by September, and Bank of America Global Research and Deutsche Bank dropped earlier calls for steady policy. The yen traded at 161.41 per dollar after touching 161.93 late Monday. Japanese Finance Minister Satsuki Katayama held an online meeting with US Treasury Secretary Scott Bessent as Tokyo considered responses to the sharp currency slide, including possible intervention.