Dollar rises as markets digest central bank news, look to year-end

  • 12/17/2021
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The dollar rose on Friday as markets approached the end of a busy week in which major central banks laid out plans to unwind pandemic-era stimulus. The greenback got a lift in morning trading in New York after a Federal Reserve official said in a television interview that the Fed will gain "optionality" to raise interest rates in 2022 by ending bond purchases by March. read more Central banks are moving at different speeds to adjust their monetary policies, underlining deep uncertainties about how the fast-spreading Omicron coronavirus variant will hit the global economy and how persistently high inflation will be. read more The dollar index rose 0.2% on the day to 96.1970. The euro and sterling fell about 0.3% after gains the two previous days and stood at $1.1299 and $1.3284, respectively, at 1454 GMT. The Fed official, John Williams, the president of the Federal Reserve Bank of New York, appeared on CNBC in one of few scheduled events on Friday of market interest after two intense days of central bank meetings and commentary on monetary policies and economies. With the meetings out of the way, "we think there will be little informational value in price action in coming days," strategists at TD Securities said in a note to clients. "The USD can consolidate into year-end as FX markets work off some residual positioning/value excesses," they added. While the dollar index on Friday was down about 0.7% from a November high, it is still up 7% since May. The Bank of England on Thursday become the first G7 economy to raise rates since the pandemic while the European Central Bank announced the end of its pandemic emergency asset-buying scheme next March, albeit while promising copious support for as long as needed via its long-running Asset Purchase Program. Their moves came after the Fed on Wednesday moved to end its bond buying sooner than had been planned, paving the way for three one-quarter-percentage-point interest rate increases next year. read more "It seems the Fed pencilling in three hikes for 2022 and (sounding) optimistic about the economic prosperity - even in the face of Omicron - has allowed other central banks the ability to take a more hawkish turn," Chris Weston, head of research at brokerage Pepperstone, wrote in a report. The yen appreciated against the dollar to 113.345. The Bank of Japan on Friday dialled back emergency pandemic-funding but maintained ultra-loose policy, cementing expectations it will remain among the most dovish central banks. read more Cryptocurrency bitcoin slipped 4% to $45,904. ======================================================== Currency bid prices at 9:54AM (1454 GMT) Description RIC Last U.S. Close Previous Session Pct Change YTD Pct Change High Bid Low Bid Dollar index 96.1970 95.9770 +0.25% 6.908% +96.2630 +95.8750 Euro/Dollar $1.1299 $1.1331 -0.28% -7.52% +$1.1349 +$1.1293 Dollar/Yen 113.3450 113.7100 -0.32% +9.70% +113.8550 +113.1450 Euro/Yen 128.07 128.82 -0.58% +0.91% +128.9700 +128.0300 Dollar/Swiss 0.9210 0.9194 +0.18% +4.11% +0.9213 +0.9175 Sterling/Dollar $1.3284 $1.3323 -0.29% -2.77% +$1.3339 +$1.3273 Dollar/Canadian 1.2833 1.2772 +0.49% +0.79% +1.2841 +1.2773 Aussie/Dollar $0.7159 $0.7183 -0.33% -6.94% +$0.7183 +$0.7149 Euro/Swiss 1.0405 1.0413 -0.08% -3.72% +1.0420 +1.0398 Euro/Sterling 0.8505 0.8501 +0.05% -4.86% +0.8528 +0.8494 NZ Dollar/Dollar $0.6763 $0.6802 -0.61% -5.86% +$0.6801 +$0.6755 Dollar/Norway 9.0010 9.0045 -0.02% +4.84% +9.0195 +8.9700 Euro/Norway 10.1715 10.1801 -0.08% -2.82% +10.2108 +10.1590 Dollar/Sweden 9.0968 9.0371 +0.42% +10.99% +9.1052 +9.0182 Euro/Sweden 10.2788 10.2363 +0.42% +2.01% +10.2870 +10.2256 Reporting by David Henry in New York and Iain Withers in London Additional reporting by Kevin Buckland in Tokyo Editing by Kirsten Donovan, Andrew Heavens and Frances Kerry Our Standards: The Thomson Reuters Trust Principles.

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