US dollar heads for its best week in 3 months against yen

US dollar is heading for its best week against the yen in 3 months on Friday, after Federal Reserve Chairman Jerome Powell and a group of US central bank officials dashed market expectations that interest rates had peaked.

According to Reuters, a large number of Federal Reserve policymakers, including Powell, said on Thursday that they are still not sure that interest rates are high enough to end the battle against inflation, comments that the markets saw as hawkish and led to a rise in the US currency.

The dollar settled near the highest level in a year at 151.355 yen on Friday and touched its highest levels in a week against the Australian and New Zealand dollars.

“Powell’s speech was very tough and that really affected sentiment,” said Tina Ting, market analyst at CMC Markets.

The statements of US Central Bank officials came after a week of keeping interest rates unchanged and enhancing expectations that they had reached their peak, causing the dollar and Treasury bond yields to decline in the aftermath.

However, the dollar regained its position this week and is on track to record weekly gains of about 1.3 percent against the yen, its best performance since August.

While the Australian and New Zealand dollars are heading towards incurring weekly losses of 2.3% and 1.75%, respectively, against the dollar, in their largest decline in months.