Dollar Index hits four-month low

<p>The Dollar Index is at its lowest point in four months.</p>

The Dollar Index has dropped to its lowest point in the last four months.

Speculation that the Federal Reserve is not going to raise lending rates proved to be damaging to the index this week, reports Bloomberg.

The dollar slipped by 0.7 per cent against the yen yesterday (June 13th), which means it has fallen by 3.5 per cent compared to its rival in the last two weeks.

Douglas Borthwick, a managing director and head of foreign exchange at Chapdelaine FX in New York, said: "The market got ahead of itself in early June, looking for ECB interest rate cuts and US Fed tapering."

He added this supports the euro against the dollar and is also good news for the yen compared with the dollar as well.

Shogo Maeda, head of Japanese equities at Schroders, said last month that the weakness of the yen is going to lead to Japanese companies being able to announce strong profits in the coming weeks and months.

Learn about the Asian markets and CFD trading at City Index

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.