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Dollar shines, euro droops as Omicron spreads while Fed hawks circle


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Dec 19, 2021  •  24 minutes in the past  •  2 minute learn  • 

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TOKYO — The U.S. greenback hovered close to the

highest since July of final yr towards main friends on Monday

after a Federal Reserve official signaled a primary pandemic-era

rate of interest hike may come as early as March.

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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 fast unfold of the Omicron coronavirus

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variant.

The greenback index, which measures the foreign money towards

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six main friends, stood at 96.629, not removed from the height at

96.938 reached final month.

The World Health Organization mentioned on Saturday that the

variety of Omicron circumstances 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 mentioned an rate of interest

improve will seemingly be warranted “shortly after” the financial institution ends

its bond purchases in March.

“Waller gave the (dollar index) a tailwind on Friday,” which

is now eyeing a brand new excessive, however “positioning is skewed long in

USDs, so the prospect of position squaring into year-end is

elevated,” Chris Weston, head of analysis at brokerage

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Pepperstone in Melbourne, wrote in a consumer observe.

“While central bank actions are the real issue, headlines on

Omicron could be seen as the smoking gun for position squaring.”

The buck, which tends to draw demand as a protected

haven, touched its highest since Dec. 15 towards the euro,

sterling and the risk-sensitive Australian greenback.

The greenback slipped although towards 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 intently correlated, languished close to a

two-week low reached Friday.

Earlier on Friday, New York Fed president John Williams informed

CNBC that the Fed will acquire “optionality” to lift charges in 2022

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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

Previous Change

Session

Euro/Dollar $1.1245 $1.1236 +0.10% -7.94% +1.1255 +1.1235

Dollar/Yen 113.5950 113.7400 -0.12% +9.98% +113.6500 +113.5400

Euro/Yen

Dollar/Swiss 0.9238 0.9241 -0.06% +4.39% +0.9244 +0.9234

Sterling/Dollar 1.3232 1.3233 +0.02% -3.13% +1.3243 +1.3225

Dollar/Canadian 1.2891 1.2894 -0.01% +1.25% +1.2901 +1.2886

Aussie/Dollar 0.7121 0.7127 -0.06% -7.41% +0.7134 +0.7109

NZ 0.6731 0.6737 -0.07% -6.25% +0.6750 +0.6726

Dollar/Dollar

All spots

Tokyo spots

Europe spots

Volatilities

Tokyo Forex market information from BOJ

(Reporting by Kevin Buckland; Editing by Sam Holmes)

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