The surge indicates investor optimism after the Trump-Kim summit in Singapore, which should see tensions between the US and North Korea simmer down.
The US currency rose to its highest level since May 23, reaching 110.495 against the Japanese yen, while the Asian currency has dropped as haven demand eases.
President Trump praised the results of the summit and said it had gone “better than anybody could have expected” and he added that the denuclearisation process would start “very, very quickly”.
The dollar was last up 0.3 per cent at 110.390 yen, after dropping slightly because of News that the White House economic adviser, Larry Kudlow, had suffered a heart attack. However, investors are concerned the summit will fail to deliver and could be nothing more than symbolic.
Adam Cole, Chief Currency Strategist at RBC Capital Markets, said: “Markets have a risk on tone as the Trump-Kim meeting has so far produced much positive symbolism, but little in the way of substance.”
Elsewhere South Korea’s won rose 0.2 per cent at 1,073.30 per dollar, while the country’s stock index, the KOSPI, slipped 0.1 percent — but remains up by almost 3 percent from its May lows.
Investors are expected to shift their attention from the Trump-Kim summit to other important events this week. Most notably, markets are anticipating key central bank policy meetings.
Shin Kadota, Senior Strategist at Barclays in Tokyo, said: “While an encouraging US-North Korea summit outcome would be supportive for the dollar, participants may opt to wait out the next big event, the Federal Open Market Committee (FOMC) meeting before committing themselves.”
On Tuesday, the US Federal Reserve Bank will commence a two-day meeting and is expected to raise interest rates, while the European Central Bank (ECB) will convene on Thursday, with forecasters suggesting that the eurozone should expect the continuation of the bank’s quantitative easing programme beyond September.
Source : EXPRESS