The dollar hovered at a 32-year high against the yen on Wednesday while nudging up from a two-week low against a basket of major rivals as traders weighed improving risk appetite against the potential of faster US Federal Reserve rate hikes.

This week, sterling held steady in the centre of its trading range as the market absorbed the British government’s fiscal policy flip and the Bank of England’s intention not to sell additional longer-duration gilts this year. The euro was trading around a two-week high.

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The dollar reached 149.395 yen yesterday for the first time since August 1990, before falling to 149.18 early in Wednesday’s Asian session.

Investors are waiting for the Ministry of Finance and the Bank of Japan to re-enter the market as the currency pair approaches the crucial psychological barrier of 150. A recent cross of 145 prompted the first yen-buying intervention since 1998.

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However, market pricing for two more 75 basis point raises from the Fed this year as it concentrates on red-hot inflation, even at the risk of triggering a recession, continues to provide underlying support. Fiscal instability in the United Kingdom is also dulling the outlook for global bond markets.

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The dollar index, which compares the greenback to six other currencies, including the yen, pound, and euro, rose to 112.01, after falling to its lowest level since October 6 at 111.76 overnight. At the end of September, it reached a multi-decade high of 114.78.

Meanwhile, sterling rose 0.27% to $1.1349 after falling 0.34% the previous day. The pound rose briefly on Tuesday when the Financial Times reported that the Bank of England will defer quantitative tightening, only to fall after the Bank called the report “inaccurate.”

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The euro remained roughly steady at $0.9857, close below Tuesday’s high of $0.98755, a level last touched on October 6.

Following Tuesday’s alarming consumer price statistics, the New Zealand currency has continued to rise, raising hopes that the Reserve Bank will continue to tighten monetary policy aggressively.

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The currency was recently trading at $0.5695, up 0.19% from the prior session’s two-week high of $0.5719. The Australian dollar was trading at $0.6322, up 0.12% from the previous day.