Breaking News
LAST CHANCE for Cyber Monday SALE: Up to 54% off InvestingPro! Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Dollar Climbs to Month-High on Safety Flows Ahead of Fed Meeting

ForexSep 20, 2021 02:55AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters.

By Peter Nurse - The dollar pushed higher in early European trade Monday, rallying to a  month-high on the back of safety flows given concerns about the health of Chinese property giant Evergrande and ahead of this week’s crucial Federal Reserve meeting.

At 2:35 AM ET (0735 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.2% higher at 93.328, having earlier climbed to 93.356, its highest since Aug. 23.

USD/JPY fell 0.1% to 109.83, EUR/USD dropped 0.1% to 1.1715, falling to its lowest since late August, GBP/USD fell 0.3% 1.3706. The risk sensitive AUD/USD fell 0.4% to 0.7237, a three-week low, hit by the slump in iron ore prices, one of Australia’s key exports.

Worries about the financial health of Evergrande have hit equities, prompting risk-off sentiment within the foreign exchange market, to the benefit of the safe-haven dollar.

Evergrande is China's second-largest property developer by sales, and has managed to rack up some $300 billion in debts. Doubts are growing over whether it will be able to make a bond interest payment of $83.5 million due on Thursday. A messy default could have wider implications on the Chinese economy at a time when growth is already looking fragile.

However, the main focus remains on the Federal Reserve, with the U.S. central bank set to hold a two-day policy meeting this week, ending on Wednesday.

The Fed is widely expected to stick with broad plans for tapering this year but will hold off providing details or a timeline at this meeting. 

That said, Friday’s U.S. consumer sentiment release showed improving confidence, while retail sales were surprisingly strong in August, implying an improving economy.

“The August job report pulled the rug from under most analysts/market participants betting on a firm September taper announcement,” said analysts at Nordea, in a note. “We are not certain that the Fed will dare to present a firm tapering plan on Wednesday, but we remain firm that they will have to take further steps toward becoming concrete on how and when [this week].”

The Fed isn’t the only central bank meeting this week, with the likes of the Bank of England, the Bank of Japan and the Swiss National Bank also scheduled to get together. But the main news could come from Scandinavia, with Norway's Norges Bank expected to become the first central bank in western Europe to lift rates.

Elsewhere, USD/CAD rose 0.3% to 1.2810, with the oil-sensitive Canadian dollar hit by Monday’s fall in oil prices as well as political uncertainty ahead of an election where polling suggests incumbent Prime Minister Justin Trudeau will remain leader of a minority government.


Dollar Climbs to Month-High on Safety Flows Ahead of Fed Meeting

Related Articles

Dollar Rebounds; Traders Reassess Omicron Risks
Dollar Rebounds; Traders Reassess Omicron Risks By - Nov 29, 2021 1

By Peter Nurse - The dollar traded higher Monday, boosted by higher U.S. Treasury yields as traders considered Friday’s sharp moves on the discovery of the omicron...

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)
Salvador Hernández Sánchez
Salvador Hernández Sánchez Sep 20, 2021 7:43AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
the dollar is the fault of commodities bearish, the people is buying euros and gbp…. The people not want usd already, stock market fail , commodities fail
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
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email