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5m ago

Dollar Heads for Best Week in Nearly a Year as Yen Slides and Euro Weakens

Foreign-currency weakness, rather than strong U.S. data, is powering the greenback’s run.

U.S. dollar banknotes are seen in this illustration taken May 4, 2025. REUTERS/Dado Ruvic/Illustration
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Overview

  • USD/JPY pushed through 153 in early European trade after Sanae Takaichi’s LDP victory drove bets on bigger spending and a slower BOJ tightening path.
  • The yen has dropped more than 3% this week, marking its worst weekly performance since September 2024, after briefly touching an eight-month low near 153 per dollar.
  • Euro softness deepened following the resignation of French Prime Minister Sebastien Lecornu, with the currency near $1.16 as the Élysée signals a new premier within 48 hours.
  • Fed September minutes flagged persistent inflation concerns alongside rising job-market risks, and markets still price roughly 44 basis points of U.S. rate cuts by December.
  • A prolonged U.S. government shutdown is delaying key economic releases, raising the risk the Fed meets with limited fresh data, while USD/JPY’s breakout above 150 leaves technicians watching resistance near 155.