Dollar jumps to five-year high versus yen; rupee slides 30 paise

The US dollar rose for a fifth straight day against the Japanese yen on Tuesday to hit a five-year high as investors anticipated the Omicron variant would not derail the global economy or delay the Federal Reserve's expected rate hikes. In India, the rupee weakended 30 paise to close at 74.58 against the dollar, snapping its three-session rising streak, amid elevated crude oil prices and a strong greenback overseas.

A rise in US treasury yields on expectations for a Fed rate hike this year have supported the greenback, with those foreseeing at least a 25 basis point hike at the March meeting topping 60 per cent, the CME FedWatch Tool found.

Yields on US 2-year notes, which are sensitive to rate hike expectations along with 5-year notes, were both higher, with the 5-year yield reaching its highest level since February 2020.

The dollar index rose 0.009 per cent, with the euro up 0.03 per cent to $1.1297. The Japanese yen weakened 0.76 per cent versus the greenback at 116.20 per dollar, after the dollar reached a high of 116.34 against the yen, its highest level since January 11, 2017.

At the interbank foreign exchange market, the Indian currency opened at 74.49 and witnessed an intra-day high of 74.46 and a low of 74.61 against the dollar.