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    Dollar rises on Powell renomination, euro hurt by COVID lockdowns

    Dollar rises on Powell renomination, euro hurt by COVID lockdowns

    Dollar rises on Powell renomination, euro hurt by COVID lockdowns
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    By CNBCTV18.com  IST (Published)

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    The dollar index against a basket of currencies rose 0.42 percent on the day to 96.53, the highest since July 2020.

    The US dollar jumped to a 16-month high against the euro on Monday after Federal Reserve Chair Jerome Powell was nominated for a second four-year term by President Joe Biden.
    On the other hand, the euro was hurt by COVID-19 related lockdowns. Lael Brainard will be Federal Reserve vice chair, the White House said.
    Brainard is a Federal Reserve board member who was the other top candidate for the Federal Reserve Chair job.
    The dollar index against a basket of currencies rose 0.42 percent on the day to 96.53, the highest since July 2020. The euro dipped 0.58 percent to $1.1233, also the weakest since July 2020.
    "With Powell being renominated for a second term, that suggests a less dovish outlook for monetary policy than under a potential Brainard leadership," said Joe Manimbo, senior market analysts at Western Union Business Solutions in Washington.
    "It looks like there's greater scope for US rate hikes under Powell with Powell remaining on as the Fed Chair, and that has been broadly positive for the dollar," Manimbo added.
    The single currency was also dragged lower as concerns grew over new COVID-19 restrictions in Europe, with Austria entering another full lockdown and Germany considering following suit.
    "It's kind of been a one-two punch for the euro. One has been a rise in cases across the bloc, and what that is doing is reinforcing the decidedly dovish outlook for (European Central Bank) policy and that stands in stark contrast to the Fed, where pressure is building for the U.S. central bank to adopt a quicker pace of normalization," Manimbo said.
    Powell and Brainard on Monday noted the corrosive impact that high inflation is having on the US economy and American families in what may be a signal that controlling the rapid pace of price increases is now the central bank's top priority.
    The Fed will release minutes from its Nov. 2-3 meeting on Wednesday, which will be evaluated for any new indications that it may speed up the taper of its bond purchases and hike rates sooner than expected.
    Fed officials Richard Clarida and Christopher Waller on Friday suggested a faster pace of stimulus tapering may be appropriate amid a quickening recovery and heated inflation.
    The dollar also gained 0.79 percent against the safe haven Japanese yen to 114.93, approaching the 4-1/2 year high of 114.97 reached on November 17.
    The greenback also gained 0.55% to hit a seven-week high of C$1.27 against the Canadian dollar.
    "Given the possibility that more virus lockdowns are announced in the coming days and weeks, risk-sensitive currencies like the CAD may trade on the defensive while declining oil prices exert an additional drag," analysts at Scotiabank said in a report on Friday.
    Currency bid prices at 3:01PM (2001 GMT)
    Description RIC Last US Close Pct Change YTD Pct High Bid Low Bid
    Previous Change
    Session
    Dollar index 96.5280 96.1380 +0.42% 7.276% +96.5510 +96.0350
    Euro/Dollar $1.1233 $1.1300 -0.58% -8.05% +$1.1296 +$1.1231
    Dollar/Yen 114.9300 114.0200 +0.79% +11.26% +114.9500 +114.0550
    Euro/Yen 129.10 128.63 +0.37% +1.72% +129.3200 +128.5700
    Dollar/Swiss 0.9331 0.9288 +0.47% +5.48% +0.9333 +0.9268
    Sterling/Dollar $1.3386 $1.3443 -0.43% -2.02% +$1.3449 +$1.3385
    Dollar/Canadian 1.2700 1.2632 +0.55% -0.26% +1.2701 +1.2630
    Aussie/Dollar $0.7226 $0.7237 -0.17% -6.08% +$0.7273 +$0.7225
    Euro/Swiss 1.0482 1.0474 +0.08% -3.01% +1.0485 +1.0449
    Euro/Sterling 0.8391 0.8393 -0.02% -6.11% +0.8403 +0.8381
    NZ $0.6953 $0.7000 -0.66% -3.17% +$0.7013 +$0.6954
    Dollar/Dollar
    Dollar/Norway 8.9285 8.9020 +0.26% +3.94% +8.9630 +8.8970
    Euro/Norway 10.0315 10.0588 -0.27% -4.16% +10.0932 +10.0082
    Dollar/Sweden 8.9895 8.9523 +0.05% +9.66% +9.0137 +8.9349
    Euro/Sweden 10.0985 10.0935 +0.05% +0.22% +10.1392 +10.0865
    -With agency inputs
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