NEW YORK: The yen and the euro jumped to one-month highs against the dollar Wednesday, more the result of traders squaring market positions than fundamental valuation shifts, analysts said.
The British pound also gained sharply, even as market expectations of a rate hike a week from now by the US Federal Reserve surged to 87 percent, the strongest they have been since an increase has been in the air.
The euro pushed to $1.1026 and the pound to $1.5183, up 1.2 percent and 1.1 percent respectively. The dollar meanwhile slipped 1.3 percent to 121.40 yen.
"Considering that Treasury yields inched higher and there were no major US economic reports on the calendar, the extent of today's unwind is surprising," said Kathy Lien of BK Asset Management.
With the Fed poised to raise the federal funds rate for the first time in more than nine years, "The key question to ask is whether the market has priced everything in and the dollar's rally is over," she said.
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