U.S. Dollar Appreciates On Lockdown Concerns, Fed Tightening Expectations
November 21 2021 - 9:07PM
RTTF2
The U.S. dollar was higher against its most major counterparts
in the Asian session on Monday, amid safe-haven demand following
rising coronavirus cases and curbs in Europe, as well as hopes for
a faster tapering of the QE program amid strong economic
recovery.
Austria imposed a full national lockdown and Germany warned of
similar measures, after COVID-19 cases continued to surge in
Europe.
Asian stocks are mostly lower, as investors worry that the virus
and restrictions could derail the economic recovery.
Hawkish comments from Fed Vice Chairman Richard Clarida and Fed
Governor Christopher Waller intensified hopes for an earlier
tightening of monetary policy.
Clarida said on Friday that the economy is "in a very strong
position" and a faster tapering of the QE program is on the
cards.
Waller urged to accelerate the pace of the tapering in the wake
of the rapid improvement in the labour market and the hot inflation
data.
Investors also await U.S. durable goods orders, GDP data,
personal consumption expenditure price index and Fed minutes due
this week for more direction.
The greenback rose to 114.23 against the yen and 1.1265 against
the euro, up from its prior lows of 113.91 and 1.1290,
respectively. The greenback is seen finding resistance around
118.00 against the yen and 1.10 against the euro.
The greenback hit a 5-day high of 0.9304 against the franc, up
from last week's close of 0.9286. The greenback is likely to
challenge resistance around the 0.95 level.
In contrast, the greenback weakened to 1.2636 against the
loonie, 0.7256 versus the aussie and 0.7013 against the kiwi, off
its early highs of 1.2658 and 0.7228 and a 5-day high of 0.6983,
respectively. Immediate support for the greenback is possibly seen
around 1.24 against the loonie, 0.74 versus the aussie and 0.72
against the kiwi.
The greenback eased off to 1.3449 against the pound, from a high
of 1.3427 hit at 10:30 pm ET. On the downside, 1.36 is possibly
seen as its next support level.
Looking ahead, U.S. existing home sales for October will be
published in the New York session.
At 10:00 am ET, Eurozone flash consumer sentiment index for
November will be out.
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