The exchange rate of the dollar against major world currencies reached a maximum of the last 20 years
On April 28, the dollar reached an all-time high for the past 20 years. Since 2002, the yen has fallen to its lowest level and the dollar/euro exchange rate is moving towards parity.
This was reported by Reuters.
After the Bank of Japan pledged to make daily purchases of an unlimited number of 10-year bonds to protect its target yield, the yen fell to a 20-year low and broke through the level of 130 per dollar.
The fall in the Japanese currency lifted the dollar index to 103.70, the highest level in five years. A further move above 103.82 would lead to a test of late 2002 levels.
Analysts believe a stronger dollar will probably put pressure on emerging markets and also slow the U.S. economy.
In addition, the European energy crisis has hit the single currency. At the same time, the euro tested major support at $1.0543.
The euro’s drop to a five-year low raises the possibility that the currency will reach parity against the dollar for the first time in 20 years, as fears of a recession in the eurozone encourage investors to bet on a falling euro.
