U.S. Dollar Advances Amid Omicron Uncertainty; GDP Data Due
December 22 2021 - 1:00AM
RTTF2
The U.S. dollar climbed against its most major counterparts in
the European session on Wednesday amid safe-haven demand, as the
spread of the omicron variant of the coronavirus prompted more
European countries to reimpose restrictions to halt the rate of
infection.
Germany announced tighter restrictions after the Christmas
holidays, limiting private gatherings to 10 people and a closure of
night clubs.
Portugal ordered bars and nightclubs to close from December 26
and outdoor gatherings will be restricted to 10 people.
In the U.S., U.S. President Joe Biden pledged that the country
will not go back to lockdowns, adding that it is Americans'
"patriotic duty" to get vaccinated.
Investors await U.S. final GDP data for the third quarter due
out at 8:30 am ET.
The Federal Reserve accelerated tapering of the asset purchase
program last week and brought forward the timing of interest rate
hikes to the first half of 2022.
The greenback edged higher to 1.1264 against the euro and 0.9253
against the franc, from Tuesday's close of 1.1285 and 0.9230,
respectively. The greenback is seen finding resistance around 1.10
against the euro and 0.94 against the franc.
The greenback touched 114.33 against the yen for the first time
since November 26. The pair had closed Tuesday's deals at 114.07.
The greenback is likely to face resistance near the 116.00
region.
Minutes from the Bank of Japan's meeting on October 27 and 28
showed that members of the monetary policy board said that the
country's economy is trending in a positive direction but remains
at risk due to Covid-19 and its variants.
To that end, the members said the central bank will continue its
current favorable monetary policy until the country reaches its
price stability target of 2 percent. Interest rates will remain at
current levels for the time being, and the members did not rule out
additional stimulus if they deemed it necessary.
In contrast, the greenback was lower against the pound, at a
5-day low of 1.3306. The pound-greenback pair had ended yesterday's
trading session at 1.3258. Next key support for the greenback is
likely located around the 1.35 level.
The greenback fell to a 2-day low of 1.2904 against the loonie,
5-day lows of 0.6780 against the kiwi and 0.7164 against the
aussie, from Tuesday's closing values of 1.2913, 0.6764 and 0.7153,
respectively. The greenback may face support around 1.26 against
the loonie, 0.70 against the kiwi and 0.74 against the aussie.
U.S. GDP data for the third quarter and existing home sales for
November will be published in the New York session.
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