Dollar Dominance: U.S. Yields Surge Amid Global Currency Shifts

The dollar strengthened on Wednesday as strong U.S. economic data led to higher yields and decreased expectations for Fed rate cuts. Simultaneously, the yen weakened close to intervention levels. Global currency fluctuations persisted, with the euro, sterling, and China's yuan hitting multi-month lows.

The dollar asserted its strength on Wednesday following robust U.S. economic data that elevated yields and reduced anticipation for Federal Reserve rate cuts. The yen, on the other hand, hovered closely to levels that triggered intervention last year, marking a significant devaluation.

Japan's Finance Minister, Katsunobu Kato, cautioned against speculative selling as the exchange rate progressed near the 160 mark, previously prompting dollar selling during last year's peak. With formidable U.S. figures boosting rates, expectations for Fed rate cuts have shifted towards mid-year.

Global markets observed fluctuations as the euro and sterling declined, while China's yuan hit a six-month low. Bond markets responded with higher yields, driven by increased U.S. job openings and economic acceleration. Antipodean currencies continued to falter, with New Zealand in outright recession and Australia's inflation trends indicating potential rate adjustments.

(With inputs from agencies.)