NEW YORK: The dollar rose on Friday as traders pulled out of riskier currencies amid concerns about a hike in interest rates by central bankers and the spread of the Omicron cases.
The dollar index rose 0.7% against major currencies, rebounding all value lost on Thursday following a series of policy statements from the central bank.
The euro and the British pound fell 0.8% and 0.6%, respectively, after registering gains over the past two days. The euro was at $1.1239 and the pound at $1.3236 at 2100 GMT.
Commodity-linked currencies, including the Australian and Canadian dollars, also lost value as crude fell 2% on concerns that the Omicron version would dampen demand.
The Australian fell 0.8% to $0.7124.
The Canadian dollar traded down 1% at 1.2895, or 77.54 US cents, its biggest decline since November 26.
The dollar was flat against the Japanese yen.
A new study from England has shown that the risk of re-infection with the Omicron coronavirus virus is five times higher than with the delta variant and shows no sign of being milder. The findings were released as European countries weigh further travel and social restrictions.
In the United States, Federal Reserve Governor Chris Waller said an interest rate hike would be needed “soon” after the Fed ended its bond purchases in March.
Earlier, New York Fed Chairman John Williams told CNBC that the Fed would have the “option” to raise interest rates in 2022 by ending bond purchases by March.
Traders are comparing changing interest rates across currencies as central banks move at varying speeds to adjust monetary policies to cope with rising signs of persistent high inflation and the Omicron threat.
The spread between yields on two-year government securities from the United States and Germany widened throughout the day to their widest in a week, reflecting the weakness of the euro.
Some analysts caution against reading too much about changes in exchange rates at this level.
“We think central bank meetings will have little informative value in price action in the coming days,” TD Securities strategists said in a note to clients on Thursday.
“USD may consolidate towards the end of the year as the FX market operates from some residual position/price surplus,” he added.
The dollar index was up nearly 8% since May, at 96.6590.
Among cryptocurrencies, bitcoin is down 3% to $46,335.
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Currency Bid Price 4:00 PM (2100 GMT)
Details RIC Last US Close PCT Change YTD PCT High Bid Low Bid
last change
Session
dollar index
96.6590 95.9770 +0.72% 7.422% +96.6840 +95.8750
Euro Dollar
$1.1239 $1.1331 -0.80% -8.00% +$1.1349 +$1.1237
dollar / yen
113.7500 113.7100 +0.04% +10.09% +113.8550 +113.1450
euro/yen
127.84 128.82 -0.76% +0.72% +128.9700 +127.8200
dollar/swiss
0.9244 0.9194 +0.55% +4.49% +0.9245 +0.9175
sterling/dollar
$1.3236 $1.3323 -0.65% -3.12% +$1.3339 +$1.3235
Dollar/Canadian
1.2895 1.2772 +0.97% +1.28% +1.2895 +1.2773
Australian dollar
$0.7124 $0.7183 -0.81% -7.38% +$0.7183 +$0.7123
euro/swiss
1.0389 1.0413 -0.23% -3.87% +1.0420 +1.0386
euro/sterling
0.8489 0.8501 -0.14% -5.01% +0.8528 +0.8489
New Zealand
Dollar/Dollar $0.6732 $0.6802 -1.00% -6.23% +$0.6801 +$0.6732
Dollar/Norway
9.0400 9.0045 +0.36% +5.23% +9.0420 +8.9700
Euro/Norway
10.1618 10.1801 -0.18% -2.92% +10.2108 +10.1390
Dollar/Sweden
9.1397 9.0371 +0.36% +11.51% +9.1432 +9.0182
Euro/Sweden
10.2728 10.2363 +0.36% +1.95% +0.2903 +0.256
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