"The U.S. Federal Reserve confirmed yesterday that its trading desk did conduct a rare "rate check" on the exchange rate between the U.S. dollar and the Japanese yen on behalf of the White House earlier this year. The move is often regarded as a precursor to actively intervening in currency markets. In this case the implication would be that the U.S. Treasury wanted to strengthen the yen versus the dollar (or, vice versa, weaken the dollar versus the yen)."
""the dollar ... depreciated markedly after reports that the Desk had made requests for indicative quotes, known as 'rate checks,' on the dollar-yen exchange rate. The manager noted that the Desk had requested those quotes solely on behalf of the U.S. Treasury in the Federal Reserve Bank of New York's role as the fiscal agent for the U.S.""
The Federal Reserve's trading desk carried out a rare 'rate check' on the U.S. dollar–Japanese yen exchange on behalf of the U.S. Treasury earlier this year. The dollar fell from ¥158.50 on January 23 to ¥152.45 by January 27, a relatively sharp move for major currencies. Private markets had expected continued dollar weakness, but stronger U.S. economic data moderated those expectations and the dollar was approaching ¥160. Treasury officials requested indicative quotes for a significant yen purchase, and reports of those requests coincided with the dollar's marked depreciation. A weaker dollar supports U.S. exports by making U.S. goods relatively cheaper abroad.
Read at Fortune
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