Breaking News
Investing Pro 0
Cyber Monday Extended SALE: Up to 60% OFF InvestingPro+ CLAIM OFFER

Dollar Edges Higher; Euro Hit by Weak German Factory Orders

Forex Dec 06, 2021 02:50AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.
 
EUR/USD
+0.17%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
GBP/USD
+0.31%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
USD/JPY
-0.71%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
AUD/USD
-0.21%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Peter Nurse

Investing.com - The dollar traded higher Monday, boosted by uncertainty over the omicron Covid variant and expectations the Federal Reserve will quickly tighten monetary policy, while the euro weakened after disappointing German factory orders.

At 2:50 AM ET (0750 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, rose 0.3% to 96.365, not far off November's 16-month peak of 96.938.

GBP/USD traded flat at 1.3232, USD/JPY rose 0.3% to 113.10, while the risk-sensitive AUD/USD rose 0.2% to 0.7016, rebounding from a 13-month low.

Additionally, EUR/USD fell 0.3% to 1.1284, with the euro hit hard after German manufacturing orders fell much more than expected in October, dropping 6.9% on the month after a revised increase of 1.8% in September, further clouding the growth outlook for manufacturers in Europe's largest economy.

The safe-haven dollar has received a boost from the uncertainty surrounding the omicron variant of the coronavirus, with the U.S. Centers for Disease Control and Prevention stating on Sunday that the new variant has now been found in about 15 U.S. states so far.

"We know we have several dozen cases and we're following them closely. And we are every day hearing about more and more probable cases so that number is likely to rise," CDC Director Dr. Rochelle Walensky told ABC News in an interview.

However, the dominant factor helping the greenback has been the public acceptance by Federal Reserve Chair Jerome Powell last week that inflation was going to stay high for longer than previously predicted, and the central bank would have to take this into account when setting policy.

Even last week’s disappointing nonfarm payrolls release did little to shake market expectations of a more aggressive U.S. tightening, especially with Friday’s consumer price report expected to show another sharp rise in the annual November number.

“Fed Chair Jay Powell's comments … that inflation is effectively no longer transitory has seen the policy-sensitive U.S. two year yield stay firm above 0.60% on the view that the Fed's normalization of monetary policy is locked and launched,” said analysts at ING, in a note.

The futures market is almost fully priced for a hike to 0.25% by May of 2022 and to 0.5% by November.

Aside from the Federal Reserve, the Reserve Bank of Australia is expected on Tuesday to hold its cash rate at a record low of 0.1% at its final meeting of the year.

Traders will be looking for any clues about the RBA’s review of its bond-buying program on Feb. 1, the first meeting of 2022.

 

Dollar Edges Higher; Euro Hit by Weak German Factory Orders
 

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 Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
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.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
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 Investing.com'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
or
Sign up with Email