The dollar surged to its strongest level in more than a year, driven by a climb in Treasury yields this week following US President Joe Biden’s decision to renominate Jerome Powell as head of the Federal Reserve.
The Bloomberg Dollar Spot Index was up as much as 0.5% after a swath of US economic data was released Wednesday (24 November), including figures that showed jobless claims at the lowest level in decades. The move pushed the greenback index to a level last seen in July 2020.
The gauge has added more than 2% this month as concerns about rising inflation have spurred bets on tighter Fed policy. The dollar has strengthened against all but two of 16 major currencies tracked by Bloomberg, as threats ranging from Covid to soaring inflation loom around the world.
Traders are watching progress in the labour market for clues on the Fed’s policy path, as Powell has emphasised such progress is a key condition for tightening monetary conditions in the world’s largest economy.
The greenback gained about 1.1% against the New Zealand dollar, the day’s biggest loser among G-10 currencies, after the New Zealand central bank raised its benchmark rate by a quarter point as forecast but disappointed some hawks by saying it would take a cautious approach to further tightening. – Bloomberg News.
On Wednesday, the US Dollar Index rose 0.40% to 96.875, the euro fell 0.44% to USD1.1199, the pound lost 0.37% to USD1.3328, and the yen finished 0.25% weaker at 115.43 per dollar.
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