Dollar stands tall as traders brace for tapering

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SINGAPORE (Businesshala) – The dollar traded near its highest level of the year on Wednesday after driving higher with US yields and benefiting from investor panic about the Federal Reserve, as global growth headwinds gather policy support. start withdrawing.

FILE PHOTO: The euro, Hong Kong dollar, US dollar, Japanese yen, pound and Chinese 100 yuan banknotes are seen in this illustration, January 21, 2016. Businesshala/Jason Lee/Illustration

The dollar rose broadly overnight to lift the dollar index to an 11-month high of 93.805. It was slightly below that level at the start of the Asia session at 92.728.

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US Treasury yields have risen – with benchmark 10-year rates rising 25 basis points to 1.5548% in five sessions – as the Fed eases looms before the end of the year and inflation starts to look more sticky than previously thought. Is. [US/]

The Japanese yen, which is sensitive to US yields as higher rates could attract inflows from Japan, fell nearly 2% in five sessions and is not far off from hitting its lowest level since February 2020 at 111.57 per dollar.

The euro fell to a one-month low overnight and, last buying $1.1684, is testing key support levels near its 2021 low of $1.1664 and its November 2020 low of $1.1602.

With the Fed’s fiery tone rising, energy prices rising and concerns rising about the growth outlook in China – now developer China is at risk from both a messy collapse at Evergrande and a rolling power outage affecting production.

“Compared with the unfulfilled optimism at the start of the year, this is a twilight zone for markets as 2021 nears its end,” Deutsche Bank strategists said in the note.

“The continued stagflation dynamics – low growth but a hawkish Fed – leaves little room for a dollar to decline,” he said.

Sterling took a special beating overnight as concerns over the economic impact of gas shortages and the scramble for fuel eased 1.2% on a stronger dollar, its biggest daily drop in more than a year. [GBP/]

The Australian and New Zealand dollars also suffered losses and the kiwi hit a one-month low. Central bank meetings are taking place in both countries next week and Norges swaps pricing points with the Bank and the Reserve Bank of New Zealand after lifting rates.

“NZD/USD is stuck around $0.7000 as the impact of the hawkish RBNZ has been offset by rising Fed expectations,” said Westpac analyst Imre Speiger.

The Kiwi closed at $0.6947 and the Australian one at $0.7248. [AUD/]

Ahead of Wednesday, Japan’s ruling party votes for a new leader who will almost certainly become the country’s next prime minister.

European Central Bank (ECB) President Christine Lagarde, Fed Chair Jerome Powell, Bank of England Governor Andrew Bailey and Bank of Japan Governor Haruhiko Kuroda are panelists on the ECB Forum.

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Currency Bid Price 0051 GMT . Feather

Details RIC Last US Close PCT Change YTD PCT High Bid Low Bid

last change

Session

Euro Dollar

$1.1684 $1.1684 +0.01% -4.37% +1.1687 +1.1683

dollar / yen

111.5550 111.4700 +0.10% +8.03% +111.6100 +111.5700

euro/yen

130.34 130.25 +0.07% +2.69% +130.4100 +130.2600

dollar/swiss

0.9293 0.9293 +0.00% +5.04% +0.9294 +0.9292

sterling/dollar

1.3538 1.3536 +0.04% -0.89% +1.3544 +1.3539

Dollar/Canadian

1.2674 1.2686 -0.09% -0.47% +1.2688 +1.2670

Australian dollar

0.7245 0.7240 +0.08% -5.80% +0.7250 +0.7239

New Zealand

Dollar / Dollar 0.6948 0.6960 -0.13% -3.20% +0.6962 +0.6947

all spots

Tokyo Spot

Europe Spot

instability

BOJ. from tokyo forex market information

Reporting by Tom Westbrook; Editing by Kim Coghill

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