Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Dollar climbs again ahead of Fed and ECB meetings

EconomyDec 14, 2021 04:26PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: A money changer counts U.S. dollar banknotes at a currency exchange office in Ankara, Turkey November 11, 2021. REUTERS/Cagla Gurdogan/File Photo

By David Henry

NEW YORK (Reuters) - The U.S. dollar rose again on Tuesday after rebounding from a dip that nearly wiped out its gains from the day before as markets jostled with the different paths major central banks are choosing between fighting inflation or the economic drag of the pandemic.

The U.S. dollar index measuring the currency against major peers was up 0.2% at 96.5520 in afternoon trading in New York after having earlier given up much of its Monday gain of 0.3%.

The rebound came largely at the euro's expense as markets digested another report of unexpectedly high U.S. inflation that could push American interest rates much higher and sooner than in Europe.

The dollar's safe-haven appeal also improved as stock indexes fell in the United States and in Europe, and as oil dropped on a prediction that the spreading Omicron variant of the coronavirus will dent global demand.

The euro was down more than 0.2% at $1.1256, near a one-week low at 3:39 p.m. ET (2039 GMT)..

The contrast between the monetary policies of the U.S. Federal Reserve and the European Central Bank is driving the euro-dollar exchange rate, said Ron Simpson, global currency analyst at Action Economics in Safety Harbor, Florida.

The Fed will update its policy on Wednesday and the ECB on Thursday.

"It's like there's no end in sight to the dovishness for the ECB, whereas it seems like every meeting the Fed is getting a little more hawkish," said Simpson.

The Fed is expected to indicate on Wednesday that it will quicken its taper from bond buying. That would open the door sooner for increases in overnight lending rates.

The dollar's gain on Tuesday was likely given an extra lift by covering of dollar-short positions after the inflation report and ahead of the two central bank meetings, he added. "I don't think it was so much a matter of initial fresh, long-dollar positions."

The latest sign of higher U.S. inflation came earlier on Tuesday with data showing that producer prices increased more than expected as supply constraints persisted. The data showed the biggest annual gain in at least 11 years.

"It's clear the Fed needs to react to higher inflation," said David Riley, chief investment strategist at BlueBay Asset Management. "It's an environment where it's very hard not to be positive on the U.S. dollar."

Markets have been pricing for the Fed to wrap up bond-buying around March and proceed with rate hikes.

The British pound gained 0.1% to $1.3224 after data showed employers hired a record number of staff in November.

The Japanese yen lost ground, with the dollar trading at 113.73 yen.

Commodity-associated currencies, including the Australian and Canadian dollar, lost to the greenback as Brent crude prices dropped toward $73 a barrel. The International Energy Agency (IEA) said the Omicron coronavirus variant is set to dent the global demand recovery.

The tension between the dollar and the euro that mirrors Fed and ECB choices is dramatically different from the start of the pandemic when central banks tended to make similar moves.

The Fed and ECB meetings headline a string of policy decisions this week that also will come from the Bank of England, the Swiss National Bank, the Bank of Japan and others.

While money markets are pricing good odds on a Fed rate hike by June, no moves are expected anytime soon from the ECB, BOJ or SNB. And, the Omicron threat could force the BoE to postpone a rate hike.

Cryptocurrency bitcoin was up 2% at $47,789 at 2039 GMT, but remains some 30% below record highs reached in early November.


Currency bid prices at 3:39PM (2039 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change


Dollar index

96.5520 96.3660 +0.20% 7.303% +96.5850 +96.0910


$1.1256 $1.1286 -0.26% -7.87% +$1.1324 +$1.1255


113.7300 113.5850 +0.15% +10.09% +113.7500 +113.4300


128.01 128.17 -0.12% +0.86% +128.5600 +128.0000


0.9241 0.9224 +0.20% +4.47% +0.9244 +0.9190


$1.3224 $1.3211 +0.11% -3.20% +$1.3256 +$1.3192


1.2856 1.2812 +0.34% +0.95% +1.2863 +1.2800


$0.7106 $0.7136 -0.42% -7.62% +$0.7135 +$0.7090


1.0403 1.0408 -0.05% -3.74% +1.0417 +1.0390


0.8510 0.8536 -0.30% -4.78% +0.8553 +0.8511


Dollar/Dollar $0.6743 $0.6752 -0.15% -6.11% +$0.6770 +$0.6735


9.1035 9.0430 +0.64% +5.99% +9.1150 +9.0480


10.2500 10.2071 +0.42% -2.08% +10.2865 +10.1919


9.1412 9.0864 +0.32% +11.53% +9.1479 +9.0665


10.2905 10.2572 +0.32% +2.12% +10.3085 +10.2516

Dollar climbs again ahead of Fed and ECB meetings

Related Articles

Dollar slips as risk appetite returns
Dollar slips as risk appetite returns By Reuters - May 17, 2022 1

By Saqib Iqbal Ahmed NEW YORK (Reuters) -The dollar fell for a third straight day on Tuesday, pulling back from a two-decade high against a basket of major peers, as an uptick in...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
Stan Smith
Stan Smith Dec 13, 2021 11:00PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Guess inflation is no longer a problem then?
Chad RicherThanYou
Chad RicherThanYou Dec 13, 2021 9:10PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Total asset market collapse coming
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email