Markets await currency swap request
The dollar has continued to strengthen against many of the major global currencies in recent sessions, but it has been predicted that its weakening against the yen is set to continue.
Experts speaking to the Wall Street Journal made the prediction, suggesting that fears over a liquidity crunch in global market could move investments to currencies with higher yields.
The credit crunch concerns are expected to keep the dollar firm against other currencies such as the euro, according to the paper.
A request for a currency swap between the US Federal Bank and the European Central Bank is expected to be in focus this week.
According to a Financial Times report, a swap could help ease the strain on the overnight federal funds rate that is a result of a "thirst for dollars" among European banks.
Commenting to the paper, economic consultant Chris Furness said such a swap - which would be the first since 2001 - could calm the market.
He added that this would be a "logical" move in light of the current climate.
The Financial Times also reported that money market conditions are expected to remain tough at the start of this week amid continued uncertainty over the derivatives markets.