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Dollar surges on hawkish Fed and consumer spending data is strong


The dollar appreciated widely on Wednesday, hitting 16-month highs against the euro and an almost five-year high against the Japanese yen, with investors betting the US Federal Reserve will tighten monetary policy faster than its peers.

Fed officials have contributed to the more hawkish view that the US central bank may act sooner to try to stem rising price pressures if inflation does not subside, while the European Central Bank (ECB) is expected to remain more accommodating as growth in the region lags.

Various Fed policymakers have said they would be willing to speed up the phase-out of their bond buying program if high inflation continues and increase interest rates faster, the report showed. bank’s latest policy meeting published on Wednesday.

The strength of the dollar is “a reflection of the willingness of appeasement that the ECB leadership shows, compared to a little more concern of the Fed for inflation, therefore perhaps a little divergence on policies” said Lou Brien, a market strategist at DRW Trading in Chicago.

San Francisco Fed Chairman Mary Daly also said on Wednesday that she might see arguments for an acceleration in the Fed’s reduction of its bond purchases.

The dollar index gained 0.37% on the day to 96.853. The euro lost 0.44% to $ 1.199.

The single currency was hit on Wednesday by data showing German business morale deteriorated for the fifth consecutive month in November, as supply bottlenecks in the manufacturing sector and an increase in infections at coronavirus have clouded the growth prospects of Europe’s largest economy.

The dollar hit an almost five-year high of 115.50 against the Japanese yen after data showed U.S. consumer spending rose more than expected in October, while price pressures also intensified during the month.

The greenback hit a seven-month high against the Swiss franc.

Other data showed on Wednesday that the number of Americans filing new jobless claims fell to its lowest level since 1969 last week, while gross domestic product data confirmed that growth has sharply. slowed down in the third quarter.

The New Zealand dollar fell to $ 0.6856, the lowest since August 23, after the country’s central bank raised rates by a quarter of a percentage point to 0.75%, disappointing some traders who expected him to hike rates by half a percentage point. .

US markets will be closed Thursday for the Thanksgiving holiday.

Chart: Global exchange rates https://graphics.reuters.com/GLOBAL-CURRENCIES-PERFORMANCE/0100301V041/index.html

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Price of currency offers at 3:02 p.m. (2002 GMT)

Description RIC Last closure US Pct Change YTD Pct High Bid Low Bid

Previous modification

Session

Dollar index 96.8530 96.5170 + 0.37% 7.637% +96.9380 +96.4340

Euro / Dollar $ 1.199 $ 1.1249 -0.44% -8.34% + $ 1.1256 + $ 1.1186

Dollar / Yen 115.4250 115.1750 + 0.22% + 11.75% +115.5150 +114.8700

Euro / Yen 129.25 129.49 -0.19% +1.84% +129.5600 +128.7000

Dollar / Switzerland 0.9341 0.9332 + 0.11% + 5.60% +0.9373 +0.9329

Pound sterling / dollar $ 1.3319 $ 1.3380 -0.43% -2.49% +1.3389 $ +1.3317

Dollar / Canadian 1.2669 1.2671 + 0.00% -0.50% +1.2710 +1.2650

Aussie / Dollar $ 0.7192 $ 0.7227 -0.48% -6.50% + $ 0.7227 + $ 0.7185

Euro / Switzerland 1.0461 1.0496 -0.33% -3.20% +1.0504 +1.0457

Euro / Sterling 0.8407 0.8407 + 0.00% -5.93% +0.8414 +0.8386

NZ $ 0.6865 $ 0.6949 -1.19% -4.38% + $ 0.6968 + $ 0.6856

Dollar / Dollar

Dollar / Norway 8.9735 8.8935 + 0.96% + 4.57% +8.9820 +8.8800

Euro / Norway 10.0519 10.0015 + 0.50% -3.97% + 10.0573 +9.9787

Dollar / Sweden 9.1315 9.0424 + 0.62% + 11.41% +9.1422 +9.0344

Euro / Sweden 10.2277 10.1651 + 0.62% +1.50% + 10.2374 +10.1510


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