The rally came largely at the expense of the euroas markets took in another unexpectedly high US inflation report that could fuel interest rate hikes in the US. Fed before in Europe.
“The dollar’s appeal as a haven also improved as stock indices fell on Wall Street and in Europe, and when oil fell on a prediction that the Omicron variant of the coronavirus will affect global demand,” traders said.
The euro lost more than 0.2% at $ 1.1256, close to a one-week low. “The contrast between the monetary policies of the Fed and the European Central Bank is driving the euro-dollar peg,” said Ron Simpson, global currency analyst at Action Economics.
The Fed closes its meeting on Wednesday and the ECB on Thursday. Markets are expecting the Fed to signal that it will accelerate its reduction in bond buying. That would open the door to increases in overnight loan interest rates sooner.
The British pound gained 0.1% to $ 1.3224 after data showed employers hired a record number of staff in November. The yen lost ground, with the dollar trading at 113.73 yen.
Source From: Ambito
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