SYDNEY, April 28 ― The dollar was nearing heights not seen in two decades today as the energy crisis in Europe hamstrung the euro, while the yen was undercut by expectations the Bank of Japan would stick to its super-easy policies.
The currency is now perilously close to huge chart support levels stretching from US$1.0500 down to a trough from 2017 at US$1.0344. A break would take it to depths not seen since 2002 and risk a damaging decline below parity. “The question now is whether the cut-off will extend to other major importers in what could quickly become a stark test of European resolve to support Ukraine in the face of surging energy prices and rising recession risks.”
The Bank of Japan is not even close to tightening as it doggedly buys bonds to keep yields near zero.