Dollar gains as rates near recent highs prior of the ECB meeting .On Wednesday, the dollar rose to a one-week high versus a basket of currencies as U.S. Treasury yields remained around the top of their recent range and the euro fell a day before the European Central Bank’s policy meeting.
The dollar index, which compares the greenback to six other currencies, rose 0.18 percent to 92.70, its highest level since September 1.
“Since the markets returned from the Labor Day holiday, we’ve seen the dollar rise in lockstep with US yields. The focus now shifts to crucial central bank meetings, with the European Central Bank meeting tomorrow and the Federal Reserve meeting later this month “Viraj Patel,
The yield on the benchmark 10-year Treasury note has climbed since Friday’s data showed that job creation in the United States stalled but pay inflation was greater than expected. The yields were recently at 1.35 percent, up about 5 basis points from the day before the data. Dollar gains as rates near recent highs prior of the ECB meeting
Inflationary pressures are aggravating the situation for Federal Reserve officials, who want to see more improvement in employment before stopping bond purchases.
In the worst-case scenario, there is some concern that nominal wages are still lagging consumer price increases due to cycle extremes… and that nominal wages are struggling to keep up with prices, which is how a wage-price spiral develops, according to Alan Ruskin, a macro strategist at Deutsche Bank .
Investors will be looking for any new signals on when a policy shift is probable in a speech by New York Fed President John Williams later on Wednesday, with many analysts still anticipating a taper to be announced later this year.
The euro dipped before the European Central Bank meeting set for Thursday. The ECB could tighten policy sooner than many anticipate as inflationary pressures could prove to be persistent, ECB policymaker Robert Holzmann said in a contribution to Eurofi Magazine on Wednesday .Dollar gains as rates near recent highs prior of the ECB meeting
Analysts polled by Reuters see PEPP purchases falling possibly as low as 60 billion euros a month from the current 80 billion, before a further fall early next year and the scheme’s end in March.
The single currency was last down 0.25% on the day at $1.1812, the lowest since Sept. 1.
Dollar gains as rates near recent highs prior of the ECB meeting. Meanwhile, cryptocurrencies have struggled to recover from Tuesday’s steep losses, when El Salvador became the first country to recognise bitcoin as legal cash, and several trading platforms reported performance concerns.
After falling as low as $42,900 on Tuesday, Bitcoin fell 0.65% to $46,576. It had hit a nearly four-month high of $52,956 earlier that day.