Dollar Index Crosses 101 for the First Time in Two Years amid Persisting Yen Slump

The dollar index on Tuesday surpassed the 101-mark for the first time since March, 2020, spurred by rising U.S. Treasury yields and bullish economic reports as the safe haven gained a new 20-year high against the Japanese yen.

According to Reuters, the dollar index had been up by 0.2% to 100.99 as of 1:26am ET. This comes after it rose by 101.02 during the initial trade. The greenback tracker has gained by 2.6% thus far this month.

Carol Kong, Commonwealth Bank of Australia’s FX Strategist said, "I think the broad dollar trend reflects U.S. economic outperformance, while we've seen some initial impacts of higher energy prices from the Ukraine war elsewhere, especially in the euro zone." She added, “If we get weak PMI numbers in the euro zone or elsewhere, then markets could potentially downgrade their expectations for the global economy, but I don't think the U.S. PMI will be particularly weak, so we'll see some contrast there, which would probably support the dollar."

The dollar has witnessed remarkable gains against the yen of late, rising by 0.73% to 127.88 yen on Tuesday, reaching the highest mark since May, 2002. However, investors continue to wager for the further decline of the yen with Japan’s Finance Minister Shunichi Suzuki warning against the currency’s fall possibly hurting the country’s economy, reported Reuters.