The US dollar recorded gains of about 0.50% this morning, Tuesday, March 22nd, with the opening of the European markets, to trade the general index concerned with measuring the movement of the dollar against a basket of currencies (Dollar Index) at levels of 98.90, recording strong increases for the second consecutive session, supported by the statements of the President of the US Federal Reserve.

Jerome Powell at the opening session of the week yesterday, Monday. Powell’s pre-prepared speech before the National Association for Business Economics in Washington, on Monday, was tougher than the markets expected, as Powell mentioned that the bank will take everything necessary to reduce the inflation rate in the United States of America, including a faster increase in interest rates than it was previously, and that if necessary a raise With more than 25 basis points, the bank will do so without hesitation.

After these statements, market bets and expectations increased, that the futures contracts, according to the CME fedWatch tool, would start pricing by more than 63%, to raise interest rates by 50 basis points at the next May meeting, which formed support for the rises of the US dollar.

On the other hand, the yield on US Treasury bonds rose more than 5% after Powell’s comments, as the yield on the ten-year bonds is trading at its highest level since May 2019 at 2.32 points.

The Japanese yen, on the other hand, is trading at its lowest level since 2016 after exceeding the psychological level of 120 against the US dollar on Monday, and is now trading at 120.50 levels, affected by the monetary policy position of the Central Bank of Japan, in addition to the rise in US bond yields.

The Governor of the Central Bank of Japan, Kuroda, in his statements this morning, Tuesday, stressed that the bank must maintain its monetary policy so that inflation does not harm the economy, in clear contradiction with Powell’s speech, and thus this explains the reverse movement between the yen and the US dollar.