U.S. Dollar Appreciates On Bets For Earlier Fed Rate Hike
November 18 2021 - 10:33PM
RTTF2
The U.S. dollar moved higher against its most major counterparts
in the Asian session on Friday amid rising treasury yields, as
investors bet on a faster tightening of the Fed's monetary policy
following hawkish comments from New York Fed President John
Williams.
Williams said on Thursday that the economy is experiencing a
broader based increase in inflation and jump in inflation
expectations, adding that officials are not willing to allow
long-run inflation expectations to move up significantly
higher.
The economy is "roaring" back, with huge gains in employment and
a sharp drop in unemployment after the pandemic.
Although the rise in short-run and long-run inflation
expectations are positive factors, the central bank would not
tolerate long-run inflation expectations to accelerate
significantly higher, he added.
President Biden's decision on whether to reappoint Federal
Reserve Chairman Jerome Powell or to select Governor Lael Brainard
to the top post is also in focus.
House Democrats are planning to vote on the Build Back Better
Act later in the day, as GOP leader Kevin McCarthy delayed a
planned vote on Thursday.
The vote was scheduled after the release of a cost estimate from
the Congressional Budget Office following a request from centrist
Democrats due to concerns about its impact on the federal
deficit.
The greenback rose to 1.1351 against the euro, 114.40 against
the yen and 0.9270 against the franc, recovering from its early
lows of 1.1373 and 114.22 and a 3-day low 0.9243, respectively. The
currency is likely to find resistance around 1.12 against the euro,
116.00 against the yen and 0.95 against the franc.
The greenback rebounded to 0.7030 against the kiwi, after
falling to 0.7046 at 6 pm ET. The greenback is seen finding
resistance around the 0.69 level.
In contrast, the greenback weakened to 0.7291 against the
aussie, from Thursday's close of 0.7276. On the downside, 0.74 is
possibly seen as its next support level.
The greenback was down against the loonie, at a 2-day low of
1.2585. If the greenback extends decline, 1.24 is possibly seen as
its next support level.
The greenback declined to 1.3510 against the pound from
yesterday's close of 1.3493. The currency may locate support around
the 1.37 region.
Looking ahead, Eurozone current account data for September is
due in the European session.
Canada retail sales for September and new housing price index
for October are scheduled for release in the New York session.
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