The US dollar continued to appreciate on June 24, reaching its highest level in 13 months against a basket of major currencies, as investors sought safe-haven assets amid a sell-off in technology stocks and bet on the possibility of the Federal Reserve raising interest rates.
The USD Index, a measure of the dollar's strength against a basket of major currencies, rose to 101.44 points, its highest level since May 13, 2025.
A sharp sell-off in technology and semiconductor stocks dragged global stock markets down, as investors took profits after a prolonged period of gains.
This development fueled demand for safe-haven assets such as the US dollar and bonds.
Meanwhile, expectations of a Fed interest rate hike continue to rise as Fed officials increasingly signal a hawkish stance thanks to the strength of the US economy .
According to the CME FedWatch tool, the market now assesses the probability of the Fed raising interest rates by another 0.25 percentage points at its July 2026 meeting at 37%, a sharp increase from 8.5% a week ago. The probability of the Fed raising interest rates in September has also increased to 70%, from 29.1% previously.
Ray Attrill, Director of Foreign Exchange Strategy at National Australia Bank (NAB), believes that the US dollar remains the most favored safe-haven asset.
For the USD to continue its strong upward trend from here, a broader decline in risk appetite across the market is needed, not just limited to the technology sector, or the market must continue to raise expectations for further Fed interest rate hikes.
On the same day, the euro traded at $1.1375/euro, near its lowest level in a year. The British pound edged lower to $1.3199/pound after Alan Taylor, a member of the Bank of England's Monetary Policy Committee, suggested that maintaining interest rates at their current level for an extended period was the appropriate response to inflationary pressures.
The Australian dollar, sensitive to risk sentiment, was nearly unchanged at 0.6918 USD/AUD ahead of the release of new inflation data later in the day. Meanwhile, the New Zealand dollar (NZD) fell 0.05% to 0.5665 USD, its lowest level in seven months.
The demand for safe-haven assets is also fueled by disagreements between the U.S. and Iran over key aspects of their agreement, including the nuclear program and control of the Strait of Hormuz. This raises doubts about the viability of the already fragile peace agreement.
The Japanese yen traded at 161.57 yen per US dollar, after briefly falling to 161.93 yen/USD late on June 23, its lowest level in two years, as the greenback continued to strengthen. A break above 161.96 yen/USD would see the yen fall to its lowest level since 1986.
The latest warnings from Japanese officials have done little to alleviate the lingering pressure on the domestic currency, amid the continued large interest rate differential between the US and Japan, and market doubts about the Japanese government 's resolve to intervene to support the yen.
Sayuri Shirai, a former member of the Bank of Japan's (BoJ) Policy Board, predicts the yen could fall to 165 yen/USD if the Fed raises interest rates this year.
Source: https://www.vietnamplus.vn/dong-usd-leo-len-muc-cao-nhat-trong-13-thang-post1120195.vnp
