FOREX-Dollar Gains With Bond Yields Rising, Fed Focuses

By Sinéad Carew and Amanda Cooper

NEW YORK/LONDON, November 18 (Reuters)The dollar gained slightly on Friday and remained on course for its biggest weekly gain in more than a month as investors watched rising bond yields and continued to bet on the upward trajectory of interest rates. the US Federal Reserve.

The US currency gained momentum as the session progressed and was up against the euro and the yen, but was down slightly against the pound, which regained some lost ground after a volatile session on Thursday after the latest UK report. budget.

In the United States on Thursday, investors had reacted to hawkish comments from policymakers with the president of the St. Louis Fed James Bullard saying that even under “generous” monetary policy analysis, the Fed must continue raising rates because its tightening so far “has had only limited effects on observed inflation.”

euro EUR=EBS was down 0.34% against the dollar at $1.0329 after rising 0.29% earlier. The pound GBP=D3 pared its gains against the greenback and rose 0.22% for the last time after rising 0.70% earlier.

Both the euro and the pound had hit multi-month highs against the dollar earlier this week after inflation data showed easing price pressures in the United States.

Joseph Trevisani, senior analyst at FXStreet, pointed to hawkish remarks from Fed officials such as Bullard that “helped thwart speculation that the Fed was approaching a pause” in its inflation campaign, and opened the way to dollar gains with the United States. Treasury yields.

“A two-day recovery in US Treasury rates gave the dollar a slight improvement after last week’s steep inflation-driven decline,” Trevisani said.

Some analysts also suggested that investors might be positioning themselves for the end of the year after the dollar’s strong rally since the start of the year.

Kit Juckes, Societe Generale macro strategist, wrote that “it may well be that the process of reducing positions before the end of the year has begun in earnest”.

“2022 has been a near-perfect storm for the dollar, which has risen on stronger growth, higher rates, terms of trade and geopolitical concerns. Liquidity conditions are deteriorating and positions are reduced “, did he declare.

In international politics, a blast in Poland had created volatility in the market earlier in the week, but Ukrainian Prime Minister Denys Shmyhal said Friday that Russian missile strikes had crippled nearly half of Ukraine’s energy system as heavy fighting continued. rabies in the eastern and southern regions.

A high level diplomat said friday that Russia is open to higher-level talks with the United States, but the Kremlin has dismissed the idea of ​​a summit between President Vladimir Putin and US President Joe Biden as “out of the question” for the instant.

against the yen JPY=EBS, the dollar gained 0.8% to 140.32 yen. However, the dollar index .DXYwhich measures the greenback against a basket of major currencies, rose 0.19% to 106.90 after falling 0.33% earlier in the day.

The index recently rose about 0.58% since the start of the week, its biggest gain since early October and representing a partial recovery from last week’s 4% losses when inflation data in the States United States triggered the biggest weekly drop in the index since March 2020.

Treasury yields rose for a second straight day with the 10-year yield US10YT=RR last at 3.825% after hitting 3.827%.

Earlier this week, stronger-than-expected U.S. retail sales data also rattled speculation that interest rate hikes would ease.

The Australian dollar AUD=D3 was down 0.21% at $0.6672, below a two-month high reached earlier this week.

The New Zealand dollar USD=D3meanwhile, rose 0.28% and headed for its fifth straight weekly gain, ahead of next week’s central bank meeting, in which rates could rise by as much as 75 basis points. . RBNZWATCH.

================================================= =====

Currency bid price at 3:21 p.m. (2021 GMT)

The description

RIC

Last

Closing of the previous session

Percentage change

Percentage change since the beginning of the year

High bid

Low bid

euro dollar

EUR=EBS

$1.0329

$1.0365

-0.34%

-9.14%

+$1.0396

+$1.0322

dollar/yen

JPY=EBS

140.3200

140.1800

+0.08%

+21.86%

+140.4950

+139.6300

Euro/Yen

EURJPY=

144.93

145.29

-0.25%

+11.21%

+145.5500

+144.5600

Dollar/Swiss

CHF=EBS

0.9533

0.9523

+0.12%

+4.52%

+0.9547

+0.9501

British pound/dollar

GBP=D3

$1.1894

$1.1868

+0.22%

-12.05%

+$1.1950

+$1.1859

Canadian dollar

CAD=D3

1.3386

1.3328

+0.43%

+5.87%

+1.3409

+1.3300

Australian/Dollar

AUD=D3

$0.6672

$0.6690

-0.21%

-8.16%

+$0.6730

+$0.6662

Euro/Switzerland

EURCHF=

0.9847

0.9866

-0.19%

-5.05%

+0.9890

+0.9848

Euro/pound sterling

EURGBP=

0.8681

0.8736

-0.63%

+3.35%

+0.8741

+0.8682

New Zealand Dollar/Dollar

USD=D3

$0.6147

$0.6131

+0.28%

-10.18%

+$0.6206

+$0.6120

Dollar/Norway

NOK=D3

10.1900

10.1285

+0.65%

+15.72%

+10.2040

+10.0890

Euro/Norway

EURNOK=

10.5275

10.4901

+0.36%

+5.14%

+10.5438

+10.4685

Dollar/Sweden

SEK=

10.6288

10.6069

-0.16%

+17.86%

+10.6393

+10.5610

Euro/Sweden

EUREK=

10.9793

10.9969

-0.16%

+7.28%

+11.0115

+10.9664

World exchange rateshttps://tmsnrt.rs/2RBWI5E

(Reporting by Sinéad Carew and Chuck Mikolajczak in New York, Amanda Cooper in London and Tom Westbrook in Singapore; Editing by David Goodman and Matthew Lewis)

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