It seems that events are in moving in favor the greenback. The US dollar surged to its highest level since the month of January versus its major rivals mainly driven by substantial fall of Japanese yen. The Japanese yen plunged on Tuesday in reaction to Fitch’s reduced rating for Japan which was decreased to A+ from AA. However many analysts are the opinion that Fitch ratings won’t have any substantial impact on the Japanese yen. Head of G-10 FX strategy, Adam Cole from RBC Capital Markets commented, “With the [Japanese government bond] market almost wholly domestically owned, the ratings agencies are largely irrelevant for the Japanese yen.”

Moreover, the euro also further weakened after comments of Greece’s former prime minister who said that if Greece leaves the euro zone the economic impact on the euro zone would be substantial.

The dollar index DXY which measures the US dollar’s performance against the basket of its six major counterparts gained to 81.674 on Tuesday as compared to 80.970 on Monday’s North American trading session. Against the Japanese yen the US dollar surged to 79.96 on Tuesday as compared to 79.30 on late Monday.

The single currency fell to 1.2688 against the US dollar on Tuesday as compared to 1.2811 on Monday’s late trading hours. The euro fell 0.3 percent against the Japanese yen to 101.38.

Among other currencies, the British Pound fell to 1.5754 versus the greenback as compared to 1.5829 on late Monday. The British Pound declined in reaction to decrease in UK’s inflation as the consumer price index stood at 3 percent in April as compared to 3.5 percent in March while analysts were expecting the reading of 3 percent. Many analysts were doubtful now that whether the current economic data would clear the way for Bank of England’s quantitative easing program.