Tokyo, September 14 – The U.S. dollar dropped to its lowest level this year against the Japanese yen on Friday, while gold prices surged to a new record, surpassing $2,570 per troy ounce. This shift is attributed to growing investor expectations that the U.S. Federal Reserve will implement a more significant interest rate cut than originally anticipated at its upcoming meeting. These developments were reported by Reuters.
Dollar Slips as Rate Cut Expectations Increase
Initially, investors expected the Federal Reserve to reduce interest rates by 25 basis points. However, many now believe the central bank may opt for a 50 basis point cut, increasing the probability of such a move to 45%, compared to 28% previously.
This shift in expectations followed reports from The Financial Times and The Wall Street Journal, which indicated that the upcoming vote by the Federal Open Market Committee (FOMC) on whether to reduce the key rate by 25 or 50 basis points is expected to be “very close.” In addition, influential former New York Fed President Bill Dudley stated that there is a strong case for a 50 basis point rate cut.
Dollar-Yen Exchange Rate Hits Lowest Point of 2023
The U.S. dollar fell by 0.81% against the Japanese yen on Friday, reaching 140.645 JPY/USD, its weakest level since December 28 of last year. The decline reflects investor concerns about potential monetary policy shifts and the broader implications for the U.S. economy.
| Date | USD/JPY Exchange Rate |
|---|---|
| December 28, 2022 | 140.645 |
| September 13, 2023 | 140.645 |
Gold Soars to New Record High
The price of gold also reacted to these developments, with the precious metal’s spot price reaching a new record of $2,570.15 USD (€2,333.11) per troy ounce, as reported by Economy Middle East. Although the price later corrected to $2,568.01 USD/ounce, this still marked a 0.38% increase from the previous closing price.
| Gold Price | Price (USD/ounce) | Price (€) | % Change |
|---|---|---|---|
| Record High | 2,570.15 | 2,333.11 | +0.38% |
| Correction | 2,568.01 | N/A | +0.38% |
Looking Ahead
As the Federal Reserve’s upcoming meeting approaches, investor attention will be firmly focused on the extent of the rate cut. Gold, often viewed as a hedge against economic uncertainty, continues to be a key asset in the current volatile market environment, while the U.S. dollar’s weakening against major currencies could signal broader changes in global economic conditions.
Key Keywords: gold record price, USD/JPY exchange rate, Federal Reserve rate cut, spot gold price, Bill Dudley comments, interest rate expectations, economy, precious metals market
