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

U.S. dollar weakens, but keeps positive outlook; sterling rises after UK data

EconomyJan 19, 2022 03:25PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: Saudi riyal, yuan, Turkish lira, pound, U.S. dollar, euro and Jordanian dinar banknotes are seen in this illustration taken January 6, 2020. REUTERS/Dado Ruvic/Illustration

By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) -The dollar slid on Wednesday, with U.S. Treasury yields retreating as well after hitting roughly two-year peaks on 2-year and 10-year notes, but the greenback remains well-supported as investors prepared for a widely expected interest rate increase in March.

U.S. 10-year Treasury yields touched a new two-year high of 1.902% on Wednesday, but was last down 4 basis points at 1.8271%.

Bond yields in other major economies rose as well, with the euro, sterling, the Canadian, Australian, and New Zealand dollars, among others, gaining versus the U.S. currency.

Sterling, meanwhile, rose after data showed British inflation rose 5.4% in December, its highest level in 30 years, raising rate hike expectations. Talks of a leadership challenge to Prime Minister Boris Johnson, however, have kept the pound in check.

"Central banks are now getting evidence that Q4 did not necessarily slow the pace of inflation and in fact, places like the U.K. are experiencing CPI numbers not seen since the early 1990s," said Juan Perez, senior FX trader and strategist, at Monex USA in Washington.

"We see the buck gaining short term, but do not sleep on other currencies as the pricing in of Fed hikes becomes an after-thought," he added.

The Fed will meet next week and will likely provide clarity and details on the end of quantitative easing, possibly in March. The U.S. central bank could also signal it will raise interest rates in March as well, right after ending QE.

Fed funds futures have fully priced in a rate hike in March and four in all for 2022.

In afternoon trading, the dollar index was down 0.2% at 95.528.

The greenback trimmed losses after data showed U.S. homebuilding unexpectedly increased in December amid unseasonably mild weather. Housing starts rose 1.4% to a seasonally adjusted annual rate of 1.702 million units last month.

The euro, the largest component in the dollar index, was up 0.2% at $1.1348, after the previous day's sharpest daily drop in a month.

The single European currency was underpinned overall after Germany's 10-year bond yield rose above 0% for the first time since 2019 on Wednesday, marking a potential turning point for euro area debt characterised for years by negative yields. [GVD/EUR]

The German 10-year yield, considered a benchmark for the whole euro zone, rose as high as 0.025%, and was last little changed on the day at -0.007% .

The euro, meanwhile, dropped to a 23-month low versus sterling after the red-hot UK inflation data. It was last flat at 83.29 pence. Against the dollar, the pound rose 0.2% to $1.3624 .

The pound was also supported by the surge in UK yields, with the two-year gilt yield rising to 0.958%, its highest level since March 2018.

The Australian dollar rose 0.5% to US$0.7224.

The U.S. dollar edged 0.2% lower versus the Canadian currency to C$1.2492 after Canada's annual inflation rate climbed to a 30-year high of 4.8% in December.


Currency bid prices at 3:10PM (2010 GMT)

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

Previous Change


Dollar index 95.5070 95.7140 -0.21% -0.163% +95.7920 +95.4940

Euro/Dollar $1.1352 $1.1327 +0.22% -0.15% +$1.1357 +$1.1319

Dollar/Yen 114.2400 114.5900 -0.31% -0.76% +114.7850 +114.2050

Euro/Yen 129.67 129.79 -0.09% -0.50% +129.9800 +129.4000

Dollar/Swiss 0.9153 0.9175 -0.25% +0.34% +0.9177 +0.9145

Sterling/Dollar $1.3626 $1.3598 +0.22% +0.76% +$1.3648 +$1.3588

Dollar/Canadian 1.2491 1.2513 -0.17% -1.20% +1.2524 +1.2450

Aussie/Dollar $0.7225 $0.7186 +0.54% -0.61% +$0.7238 +$0.7177

Euro/Swiss 1.0391 1.0391 +0.00% +0.21% +1.0403 +1.0375

Euro/Sterling 0.8330 0.8328 +0.02% -0.83% +0.8342 +0.8314

NZ $0.6796 $0.6765 +0.44% -0.72% +$0.6811 +$0.6764


Dollar/Norway 8.7610 8.8125 -0.58% -0.54% +8.8220 +8.7490

Euro/Norway 9.9445 9.9682 -0.24% -0.68% +9.9947 +9.9215

Dollar/Sweden 9.0959 9.1357 -0.21% +0.86% +9.1551 +9.0906

Euro/Sweden 10.3256 10.3476 -0.21% +0.90% +10.3686 +10.3160

U.S. dollar weakens, but keeps positive outlook; sterling rises after UK data

Related Articles

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 (1)
Thankyawsoe Soe
Thankyawsoe Soe Jan 19, 2022 8:40AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
good jobs
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