Federal Reserve Chair Janet Yellen’s popularity must be soaring among her global central bank peers.
The dollar has surged against other developed-market currencies, reaching an almost eight-year high versus the yen, since the end of last week, when she said she expects to raise interest rates this year for the first time since 2006. By contrast, central banks in Japan and Europe are pursuing currency-depreciating stimulus to spur inflation, while policy makers from Australia to Canada say they want lower exchange rates to bolster economic recoveries.
“Looking at Yellen’s comments from the end of last week, it seems like she’s determined to act this year,” said Yasuhiro Kaizaki, vice president for global markets at Sumitomo Mitsui Trust Bank Ltd. in New York. “Until recently, I think people were only really buying the dollar against the euro, but it’s clear now that you can buy the dollar against many different currencies.”