Dollar holds near one-year high amid bets for earlier Fed rate hike

  • 10/13/2021
  • 00:00
  • 15
  • 0
  • 0
news-picture

TOKYO (Reuters) - The dollar held near a one-year high versus major peers on Wednesday, amid rising expectations the Federal Reserve will announce a tapering of stimulus next month, potentially following with interest rate hikes by mid-2022. Three Fed policymakers said overnight that the U.S. economy has healed enough to begin to scale back the central bank’s asset-purchase programme, including Vice Chair Richard Clarida. Money markets now price about a 50-50 chance of a rate increase by July. The dollar index, which measures the greenback against six rivals, eased slightly to 94.460 from Tuesday, when it touched 94.563 for the first time since late September 2020. A surge in energy prices has fuelled inflation concerns and stoked bets that the Fed may need to move faster to normalise policy than officials had projected, sending two-year Treasury yields to their highest in more than 18 months overnight. [US/] Higher U.S. yields helped push the dollar to a three-year high against the yen on Tuesday at 113.785 yen . The pair last traded at 113.485. The euro changed hands at $1.1541, well within sight of the previous session’s $1.1522, its lowest in nearly 15-month months.Traders will focus on consumer price data later on Wednesday for further insight into the timing of higher rates. “CPI is the main economic draw” and “has the potential to see Fed rate hike expectations move again, one way or another,” said Ray Attrill, head of foreign exchange strategy at National Australia Bank in Sydney. Most Fed policymakers continue to say inflationary pressures will prove transitory. Governors Lael Brainard and Michelle Bowman are among the Fed officials due to speak later Wednesday, when the minutes of the central bank’s September meeting are also due to be released. Sterling meandered in the middle of this month’s range, trading little changed from Tuesday at $1.3596. The risk-sensitive Aussie dollar slipped 0.2% to $0.7335, retreating from Tuesday’s one-month high at $0.7384. Bitcoin traded around $56,500, after reaching a five-month high of $57,855.79 at the start of the week.

مشاركة :