Dollar hits multi-week highs as Taken care of seen less hesitant than peers

Even so, Japan’s top currency diplomat Masato Kanda stressed on Friday that Tokyo stands ready to take further “resolute” action against “speculative, excessive volatility”.

The dollar last traded 0.04% weaker at 158.875 yen, after earlier edging as high as 159.12.

The U.S. currency was little changed at 0.8909 Swiss franc, following a 0.78% surge overnight.

The dollar index eased 0.09% to 105.54, on course for a flat finish to the week, following two straight weeks of gains.

Sterling added 0.05% to $1.26635, not straying far from the $1.2655 low from Thursday, a level last seen on May 17. The BoE kept rates on hold, but some policy makers said the decision not to cut was “finely balanced”.

The euro climbed 0.17% to $1.07198, clawing back part of Thursday’s 0.39% slide. The European Central Bank kicked off its rate cutting cycle earlier this month.

Fed officials, meanwhile, left policy unchanged at their June meeting, and shaved previous projections for three quarter-point cuts this year to one, even as inflation has cooled and the labour market has eased.

“The resilience of the U.S. economy has afforded the Federal Reserve a unique position, enabling the U.S. central bank to employ higher interest rates as a tool to combat inflation more swiftly than it otherwise could,” said James Kniveton, senior corporate FX dealer at Convera.

“With other major central banks adopting more dovish stances, this has the potential to continue to bolster the dollar over the short to medium term.”

($1 = 158.9900 yen)