Baghdad - The US dollar stabilized today, Friday, near its highest levels in 19 months, supported by increasing market expectations regarding the likelihood of a larger-than-usual increase in US interest rates. Meanwhile, the Japanese yen declined to levels close to 160 yen per dollar, raising fears of intervention by Japanese authorities to support their currency.
US Treasury yields rose following statements from President Donald Trump, confirming that the United States does not need a deal with Iran, coinciding with investors assessing the chances that the Federal Reserve may raise interest rates by more than usual next month.
The yields on two-year Treasury notes recorded a rise of 34 basis points over the past two sessions, the largest increase in two days in nearly three and a half years.
In the currency markets, the euro fell by 0.1% to 1.1049 dollars, approaching its lowest levels since April 2025, while it headed for a weekly loss of about 0.8%, the largest since late September.
These moves came after warnings from Federal Reserve officials regarding the continued rise in inflation in the United States, with some indicating a willingness to raise interest rates by 50 basis points if price pressures persist.
According to the CME Group's "FedWatch" tool, trader expectations for a significant interest rate hike next month rose to 14.5%, after being completely ruled out last week.
In Japan, the yen stabilized at 159.875 yen against the dollar after briefly exceeding the 160 yen mark, which heightened fears of government intervention in the foreign exchange market.
Japanese Finance Minister Satsuki Katayama stated that the government will take appropriate measures to deal with currency fluctuations, indicating that authorities are monitoring the recent movements of the yen.
Conversely, the dollar index, which measures the performance of the US currency against a basket of major currencies, fell by 0.05% to 103.17 points, while remaining near its highest levels since April 2025.
Regarding other currencies, the Australian dollar fell by about 2.5% over the past month, becoming the worst-performing among the G10 currencies against the US dollar, recording in the latest trading at 0.68 dollars.
Investors are also monitoring developments in the stock markets, particularly the technology sector, amid pressures related to funding concerns and regulatory legislation, as well as the volatility seen in the shares of major companies.