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Dollar Up, Gains From Euro’s Fall as Focus Remains on Interest Rate Hike Timelines



Dollar Up, Gains From Euro’s Fall as Focus Remains on Interest Rate Hike Timelines
© Reuters

By Gina Lee – The dollar was up on Friday morning in Asia, and is poised to post a second week of gains against the euro. The focus is now on when central banks will begin hiking interest rates in response to rising inflation.

The that tracks the greenback against a basket of other currencies edged up 0.12% to 95.657 by 11:55 PM ET (4:55 AM GMT).

The pair inched up 0.10% to 114.36, with Japan’s and both growing 0.1% year-on-year in October.

The pair inched down 0.06% to 0.7275 and the pair inched up 0.02% to 0.7037.

The pair inched up 0.01% to 6.3856 while the pair inched down 0.01% to 1.3486. Bets that the Bank of England will hike interest rates in December are mounting as inflation rose to a 10-year high in October.

The euro fell 0.6% during the past week, boosting the dollar to a 16-month high. It last traded at 1.1372 after falling to $1.1263 earlier, but remains vulnerable as fundamentals and positioning swing to favor the dollar, according to investors.

“Previous post-global financial crisis occasions when the euro traded below $1.10 were accompanied by a big euro short position,” Societe Generale (OTC:) strategist Kit Juckes told Reuters.

“If the question is ‘will the market now get very short euros’ then I think the answer is that it will unless data improve dramatically.”

Several central bankers, including European Central Bank President Christine Lagarde, Bank of England economist Huw Pill and the U.S. Federal Reserve’s Christopher Waller, Richard Clarida, and Mary Daly, will speak later in the day.

Bets are also rising on the handing down a hawkish monetary policy that will hike the interest rate by 50 basis points (bps) .

“Rates markets remain skittish and the data pushed the bellwether two-year swap to a new high for the year, and that in turn, put the bid in behind the kiwi,” ANZ Bank analysts said in a note.

“With 36 bps of hikes priced in for next week and 198 bps priced in over the next eight meetings, local markets could be setting themselves up for some real disappointment if we ‘only’ get a 25-bps hike, as we expect,” the note added.

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China stock market closed in the red amid protests in China



China stock market

The Chinese stock market chart closed in the red, recording its worst session in a month, as recent measures to ease monetary policy could not offset investor concerns about protests against tight covenant restrictions in the world’s second-largest economy.

China once again recorded record numbers of coronavirus infections on Monday following protests across the country against strict covid restrictions.

Amid concerns, investor sentiment on China’s stock market couldn’t be much affected by the People’s Bank of China, which said on Friday it will lower requirements on the amount of funds banks must hold as reserves for the second time this year, freeing up about 500 billion yuan ($69.8 billion) of long-term liquidity to support the slowing economy.

In turn, consumer and tourism-related stocks rose, as some investors bet that the recent COVID-19 outbreaks and social unrest could push China to end its “zero tolerance” COVID-19 policy earlier.

Earlier we reported that the gold price was showing moderate gains in reaction to the US Federal Reserve meeting minutes.

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Gold price today shows moderate growth, reacting to U.S. Federal Reserve meeting minutes



forex gold price

Gold prices today are rising, trading data show. Markets are processing the minutes of the November meeting of the U.S. Federal Reserve (Fed).

Forex gold price on the New York Comex rose $8.35, or 0.48%, to $1,753.95 a troy ounce. December silver futures rose 0.44% to $21.46 an ounce.

Investors pay attention to the minutes of the Federal Reserve meeting published this week. The document indicated that the regulator considers it expedient to slow down the rate of interest rate increases soon. According to the CME Group, 71.1% of analysts forecast a new 50 basis point hike in December after a 75-point increase in November.

The monetary policy easing is having a negative impact on the dollar. The dollar index (the exchange rate against a basket of currencies of six U.S. trading partners) is down nearly 1% for the week. The cheaper the U.S. currency, the more expensive gold becomes as it becomes more available for purchase in other currencies. The yellow metal has been showing a rise of about 1% since Monday.

Earlier we reported that the U.S. dollar is stable against the euro and yen and rising against the pound.

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The US dollar rate is stable against the euro and the yen and goes up against the pound



us dollar rate

In today’s trading the US dollar rate is stable against the euro and the yen and is strengthening against the pound. A day earlier, the dollar weakened against the world’s major currencies following the release of the Federal Reserve’s (Fed) November meeting minutes, which showed that the overwhelming majority of U.S. central bankers see the need to slow down the pace of rate hikes soon.

The ICE index that shows the dollar’s movement against six currencies (euro, Swiss franc, yen, Canadian dollar, pound and Swedish krona) lost 0.17% on Friday, while the broader WSJ Dollar Index was stable.

Current dollar rate

The euro/dollar pair was trading at $1.0411, up from $1.0410 at the close of the previous session. The dollar was trading at 138.61 yen against the Japanese yen at the same time, compared to 138.54 yen the previous day. The pound exchange rate fell to $1.2103, compared to $1.2113. Yesterday the dollar was 0.2% cheaper against the euro, 0.7% cheaper against the yen, and 0.5% cheaper against the pound.

“Some of the Fed leaders observed that monetary policy had reached a state in which it was sufficiently restrictive to meet FOMC goals and it would be appropriate to slow rate hikes. The vast majority of meeting participants felt that slowing the pace of the hike would probably be appropriate in the near term,” noted the minutes of the Nov. 1-2 Fed meeting.

Some of the U.S. central bank leaders, meanwhile, believed that the Fed would have to raise the rate higher than previously planned to meet its goal of easing inflation.

They indicated that the rate “would have to reach a somewhat higher level than previously expected,” given the lack of enough signals of easing in U.S. inflation at the moment, as well as the continuing imbalance of supply and demand in the economy.

Earlier we reported that Italian Enel plans to sell assets for 21 billion euros to reduce debt.

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