U.S. Dollar Higher On Fed Rate Hike Bets
November 11 2021 - 5:06AM
RTTF2
The U.S. dollar climbed against its most major counterparts in
the European session on Thursday, as hotter than expected U.S.
consumer inflation data brought forward expectations of interest
rate hikes by the Federal Reserve.
The Labor Department report on Wednesday showed the fastest
growth in consumer prices since November 1990.
U.S. treasury yields and inflation expectations surged, pushing
up expectations for faster rate hikes by the Fed.
Traders are assessing the possibility of a liftoff soon after
the end of the bond purchase program by the middle of next
year.
The money markets are pricing in a first Fed rate hike by
July.
San Francisco Federal Reserve Bank President Mary Daly on
Wednesday said that inflation would ease after the impact of
COVID-19 fades and pushed back against an early tightening
expectations.
The greenback firmed to more than a 2-week high 0.9225 against
the franc, more than 1-year high of 1.1454 against the euro and
near a 1-year high of 1.3364 against the pound, following its prior
lows of 0.9166, 1.1488 and 1.3433, respectively. The greenback is
likely to face resistance around 0.94 against the franc, 1.13
against the euro and 1.32 against the pound.
The greenback reached a 4-week high of 0.7013 against the kiwi,
5-week highs of 1.2585 against the loonie and 0.7287 against the
aussie, off its previous lows of 0.7071, 1.2473 and 0.7341,
respectively. Next key resistance for the greenback is likely seen
around 0.68 against the kiwi, 1.27 against the loonie and 0.70
against the aussie.
In contrast, the greenback pulled back to 113.81 against the
yen, from a 1-week high of 114.16 seen at 9:45 pm ET. The currency
may challenge support around the 112.00 area.
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