U.S. Dollar Appreciates As Fed Rate Hike Bets Escalate
November 16 2021 - 9:31PM
RTTF2
The U.S. dollar climbed against its key counterparts in the
Asian session on Wednesday, as U.S. treasury yields rose and hopes
for an earlier Fed rate hike intensified after solid data on retail
sales and industrial production for October.
Overnight data showed that U.S. retail sales rose 1.7 percent
month-on-month in October, above expectation of 1.4 percent.
U.S. industrial production rose 1.6 percent month-on-month in
October, beating forecasts for an increase of 0.7 percent following
the 1.3 percent drop in September.
The benchmark yield on 10-year note rose 1.64 percent. Yields
move inversely to bond prices.
The dollar index climbed to its highest level since July 2020,
at 96.24.
The U.S. Federal Reserve should turn more hawkish and accelerate
the pace of the QE tapering, if inflationary pressures persist, St
Louis Fed President James Bullard said in an interview on Bloomberg
TV.
The committee should move in a more hawkish direction in the
next couple of meetings to manage the risk of inflation
appropriately, Bullard told.
The greenback appreciated to a 1-1/2-month high of 0.9330
against the franc, more than 1-year high of 1.1263 against the euro
and a 4-1/2-year high of 114.97 against the yen, following its
prior lows of 0.9292, 1.1327 and 114.70, respectively. The
greenback is seen finding resistance around 0.95 against the franc,
1.10 against the euro and 116.00 against the yen.
The greenback touched a 1-1/2-month high of 0.7262 against the
aussie, after falling to 0.7305 in early trades. The greenback is
likely to find resistance around the 0.70 level.
In contrast, the greenback dropped to a 1-week low of 1.3474
against the pound, from an early 5-day high of 1.3396. Next key
support for the greenback is seen around the 1.37 level.
The greenback dropped to 0.7010 against the kiwi and 1.2550
against the loonie, off its prior near a 5-week high of 0.6980 and
a 5-day high of 1.2586, respectively. The greenback is poised to
challenge support around 0.72 against the kiwi and 1.24 against the
loonie.
Looking ahead, Eurozone CPI for October and construction output
for September are due in the European session.
Canada CPI and U.S. housing starts and building permits, all for
October, are scheduled for release in the New York session.
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