By Kevin Buckland
TOKYO (Reuters) – The U.S. greenback hovered close to the best since July of final 12 months in opposition to main friends on Monday after a Federal Reserve official signaled a primary pandemic-era rate of interest hike may come as early as March.
The euro sank with the British pound after the Netherlands went into lockdown on Sunday and Britain’s well being minister declined to rule out the prospect of additional restrictions earlier than Christmas amid the speedy unfold of the Omicron coronavirus variant.
The , which measures the foreign money in opposition to six main friends, stood at 96.629, not removed from the height at 96.938 reached final month.
The World Health Organization stated on Saturday that the variety of Omicron instances is doubling in 1.5 to three days in areas of the world with neighborhood transmission, however famous that a lot stays unknown concerning the variant, together with the severity of the sickness it causes.
On Friday, Fed Governor Chris Waller stated an rate of interest improve will possible be warranted “shortly after” the financial institution ends its bond purchases in March.
“Waller gave the (greenback index) a tailwind on Friday,” which is now eyeing a brand new excessive, however “positioning is skewed lengthy in USDs, so the prospect of place squaring into year-end is elevated,” Chris Weston, head of analysis at brokerage Pepperstone in Melbourne, wrote in a consumer be aware.
“While central financial institution actions are the true difficulty, headlines on Omicron may very well be seen as the smoking gun for place squaring.”
The dollar, which tends to draw demand as a protected haven, touched its highest since Dec. 15 in opposition to the euro, sterling and the risk-sensitive Australian greenback.
The greenback slipped although in opposition to fellow haven foreign money the yen, however nonetheless close to the center of the buying and selling vary of the previous three weeks.
Ten-year U.S. Treasury yields, to which the dollar-yen pair are sometimes carefully correlated, languished close to a two-week low reached Friday.
Earlier on Friday, New York Fed president John Williams instructed CNBC that the Fed will acquire “optionality” to lift charges in 2022 by ending bond purchases by March.
Money markets value about 50-50 odds of 1 / 4 level hike by March.
Currency bid costs at 0109 GMT
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
$1.1245 $1.1236 +0.10% -7.94% +1.1255 +1.1235
113.5950 113.7400 -0.12% +9.98% +113.6500 +113.5400
127.75 127.77 -0.02% +0.65% +127.8200 +127.6200
0.9238 0.9241 -0.06% +4.39% +0.9244 +0.9234
1.3232 1.3233 +0.02% -3.13% +1.3243 +1.3225
1.2891 1.2894 -0.01% +1.25% +1.2901 +1.2886
0.7121 0.7127 -0.06% -7.41% +0.7134 +0.7109
Dollar/Dollar 0.6731 0.6737 -0.07% -6.25% +0.6750 +0.6726
Tokyo Forex market information from BOJ