Crédit Lyonnais: Interest rate differential helps push Australian dollar to yen higher, hitting a 33-year high

According to Societe Generale, the Australian dollar against the Japanese yen may further strengthen under favorable interest rate differentials, reaching a 33-year high. Jukes, a forex strategist at Societe Generale, said in a report that the Australian dollar continues to be supported by strong data, including Wednesday’s retail sales data. The current yield curve suggests a 50% chance of another rate hike for the Australian dollar this year. At the same time, many believe that as long as the interest rate differential remains large, the yen will continue to decline. ‘I believe the yen will not rebound until the Fed implements loose policies.’