* Dollar index, dollar/euro at near 16-month highs* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E(Updates prices, adds commentary, a
* Dollar index, dollar/euro at near 16-month highs
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
(Updates prices, adds commentary, adds byline, NEW YORK
dateline)
By Tommy Wilkes and Sinéad Carew
LONDON/NEW YORK, Nov 11 (Reuters) – The dollar rose to
almost 16-month highs against the euro and other currencies on
Thursday, after the hottest U.S. inflation reading in 30 years
encouraged bets on interest rate hikes.
Wednesday’s data showed that U.S. consumer prices grew last
month at their fastest annual pace since 1990, fueling
speculation that the Federal Reserve will have to respond by
lifting interest rates faster than expected as traders question
the central bank’s stance that the current spate of high
inflation is transitory.
While the U.S. bond market was closed for the Veterans Day
holiday, the dollar index still looked set for its second
straight day of gains so far touching its highest level since
July 23 2020. It was last up 0.19% at $95.003.
The euro was down 0.07% at $1.1468 after hitting
$1.1454 its lowest since July 21 2020.
“It feels like we’re still trading the repercussions of the
CPI,” said Vassili Serebriakov, FX strategist at UBS in New
York.
“The path of least resistance in the short term appears to
be dollar higher .. Stronger inflation weakens the transitory
narrative which means the Fed might need to tighten sooner.”
Sterling was down 0.03% at $1.3396 after earlier
hitting $1.33650, its lowest level since Dec. 2020. Data showing
Britain’s economy lagging rivals in the July-September period
did little to help.
The greenback was last up 0.01% against Japan’s yen
and traded a range of 113.81 yen to 114.15 during the
session after the dollar rose sharply against the yen on
Wednesday.
“The hawkish repricing of Fed policy expectations has
reinforced the U.S. dollar’s upward momentum from the previous
week in which it had already benefited from the other G10
central banks pushing back against rate hike expectations
outside of the U.S,” said Lee Hardman, currencies analyst at
MUFG.
Emerging market (EM) currencies had also suffered from the
dollar’s broad rise on Wednesday and earlier in Thursday’s
session but MSCI’s EM currencies index was last
up 0.07%.
The Australian and New Zealand dollars slipped, pulled lower
by the jump in the U.S. dollar. The Aussie 0.28% to
$0.7305 fell half a percent to a one-month low of $0.7287 and
New Zealand’s Kiwi dropped 0.4% to $0.7034.
Elsewhere, Turkey’s lira tumbled to a new record low of
9.975 to the dollar after the U.S. inflation reading
and as expectations grow Turkey will cut rates again soon.
In crypto currencies, bitcoin was up 0.48% at
$65,229.81 after hitting a $69,000 intraday record on Wednesday.
========================================================
Currency bid prices at 9:52AM (1452 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index 95.0030 94.8340 +0.19% 5.581% +95.1010 +94.8240
Euro/Dollar $1.1468 $1.1477 -0.07% -6.13% +$1.1488 +$1.1454
Dollar/Yen 113.9150 113.9000 +0.01% +10.24% +114.1550 +113.8100
Euro/Yen 130.64 130.72 -0.06% +2.93% +130.9900 +130.4500
Dollar/Swiss 0.9218 0.9182 +0.40% +4.20% +0.9224 +0.9180
Sterling/Dollar $1.3396 $1.3402 -0.03% -1.93% +$1.3432 +$1.3365
Dollar/Canadian 1.2585 1.2499 +0.69% -1.17% +1.2587 +1.2472
Aussie/Dollar $0.7305 $0.7326 -0.28% -5.03% +$0.7341 +$0.7287
Euro/Swiss 1.0570 1.0538 +0.30% -2.19% +1.0572 +1.0536
Euro/Sterling 0.8560 0.8559 +0.01% -4.22% +0.8574 +0.8543
NZ $0.7034 $0.7058 -0.40% -2.10% +$0.7071 +$0.7013
Dollar/Dollar
Dollar/Norway 8.6730 8.6450 +0.70% +1.38% +8.7065 +8.6365
Euro/Norway 9.9464 9.9276 +0.19% -4.97% +9.9765 +9.9101
Dollar/Sweden 8.7059 8.6992 -0.06% +6.22% +8.7338 +8.6868
Euro/Sweden 9.9846 9.9902 -0.06% -0.91% +10.0101 +9.9633
(Additional reporting by Tommy Wilkes and Saikat Chatterjee in
London, Editing by Timothy Heritage, Mark Potter and Nick
Zieminski)
www.lse.co.uk