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Dollar gains with yields as Fed policy in focus

EconomySep 10, 2021 03:27PM ET
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© Reuters. FILE PHOTO: Four thousand U.S. dollars are counted out by a banker counting currency at a bank in Westminster, Colorado November 3, 2009. REUTERS/Rick Wilking

By Karen Brettell

NEW YORK (Reuters) - The dollar rose on Friday in line with higher U.S. Treasury yields as investors focused on when the Federal Reserve is likely to begin reducing its asset purchases.

The greenback has risen from a one-month low reached last Friday after jobs data for August showed that jobs growth slowed, while wage inflation rose more than expected.

It has not yet been able to establish a strong trend, however, as investors wait on new clues on when the Fed is likely to begin paring its bond purchases and, eventually, raise rates.

“That to me is the most important thing, is when does the Fed hike rates, and unfortunately we may not know that for a little while,” said Erik Nelson, a macro strategist at Wells Fargo (NYSE:WFC) in New York.

Cleveland Fed President Loretta Mester said on Friday that she would still like the central bank to begin tapering asset purchases this year, joining the chorus of policymakers making it clear that their plans to begin scaling back support were not derailed by weaker jobs growth in August.

Fed officials are grappling with rising price pressures while jobs growth remains below their targets.

Data on Friday showed that U.S. producer prices increased solidly in August, indicating that high inflation is likely to persist for a while, with supply chains remaining tight as the COVID-19 pandemic drags on.

The Wall Street Journal on Friday wrote that Fed officials will seek to make an agreement at the Fed’s September meeting to begin paring bond purchases in November.

The dollar index gained 0.05% to 92.57. It is up from a one-month low of 91.94 on Friday.

The U.S. currency had dipped earlier on Friday on improving risk sentiment on news that U.S. President Joe Biden and Chinese leader Xi Jinping spoke for the first time in seven months.

In a statement, the White House said Biden and Xi had "a broad, strategic discussion," including areas where interests and values converge and diverge. The conversation focused on economic issues, climate change and COIVD-19, a senior U.S. official told reporters.

The dollar was last down 0.13% to 6.4419 yuan, nearing a more than two-month low of 6.4233 yuan reached last week.

The euro fell 0.07% to $1.1816 on Friday, a day after the European Central Bank said it will trim emergency bond purchases over the coming quarter.

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

Currency bid prices at 3:04PM (1904 GMT)

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

Previous Change

Session

Dollar index 92.5650 92.5320 +0.05% 2.872% +92.6110 +92.3280

Euro/Dollar $1.1816 $1.1825 -0.07% -3.29% +$1.1851 +$1.1813

Dollar/Yen 109.8900 109.7150 +0.19% +6.42% +109.9850 +109.7000

Euro/Yen 129.85 129.73 +0.09% +2.31% +130.2700 +129.7000

Dollar/Swiss 0.9179 0.9168 +0.13% +3.76% +0.9184 +0.9150

Sterling/Dollar $1.3843 $1.3835 +0.06% +1.33% +$1.3888 +$1.3834

Dollar/Canadian 1.2657 1.2665 -0.06% -0.60% +1.2672 +1.2583

Aussie/Dollar $0.7362 $0.7368 -0.07% -4.28% +$0.7409 +$0.7360

Euro/Swiss 1.0846 1.0836 +0.09% +0.36% +1.0862 +1.0836

Euro/Sterling 0.8535 0.8543 -0.09% -4.50% +0.8547 +0.8521

NZ $0.7123 $0.7108 +0.21% -0.81% +$0.7156 +$0.7092

Dollar/Dollar

Dollar/Norway 8.6500 8.6735 -0.22% +0.79% +8.6820 +8.6180

Euro/Norway 10.2227 10.2552 -0.32% -2.33% +10.2700 +10.1910

Dollar/Sweden 8.6230 8.6070 +0.07% +5.20% +8.6252 +8.5945

Euro/Sweden 10.1892 10.1825 +0.07% +1.12% +10.2019 +10.1715

Dollar gains with yields as Fed policy in focus
 

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Comments (3)
Antonio Velardo
Antonio Velardo Sep 10, 2021 6:14PM ET
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If the market crashes many people lose their job. I hope the economists here know very well what to do.
Md Rana
Md Rana Sep 10, 2021 3:36PM ET
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Dollar 1000
Sol Wein
Sol Wein Sep 09, 2021 10:50PM ET
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Dollar is toast! Fed has no exit! I chalenge anyone to convince me otherwise
Bill Bill
Bill Bill Sep 09, 2021 10:50PM ET
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Nah.
 
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