By Gina Lee

Investing.com – The dollar was down on Thursday morning in Asia, but was near a one-year high as the U.S. Federal Reserve prepares to begin asset tapering in November 2021.

The that tracks the greenback against a basket of other currencies inched down 0.07% to 94.287 by 11:38 PM ET (3:38 AM GMT). The 94.435 mark was reached on Wednesday for the first time since September 2020.

The pair inched down 0.09% to 111.85.

The pair gained 0.42% to 0.7205 and the pair edged up 0.20% to 0.6884.

The pair inched up 0.01% to 6.4710. Chinese released earlier in the day showed that September’s purchasing managers index (PMI) was at 49.6. The PMI and the were at 53.2 and 50 respectively.

The pair was up 0.25% to 1.3455. However, concerns remain about soaring prices alongside petrol shortages in the U.K. that have lasted almost a week.

Concerns that the Fed may begin to taper in an era of slower global economic growth as well as persistently high inflation saw the safe-haven dollar gain ground. As the U.S. debt limit impasse threatens to stop the government, it also saw a rebound.

The Democrats tried to stop efforts of the U.S. Senate Republicans to avert a potential crippling U.S. Credit default. Federal funding ends on Thursday, and borrowing authority expires around October 18.

“King U.S. dollar is in the house, it doesn’t matter the currency, just buy dollars has been the vibe,” Pepperstone head of research Chris Weston said in a note.

“We’re effectively seeing both the left and right side of the U.S. dollar ‘smile’ theory [which says that the dollar does well in good times or bad times for the U.S. economy, but not in between] working in earnest,” with “stagflation concerns” on the rise and the Fed making it clear that it will begin asset tapering in November 2021 and investors pricing interest rate hikes in December 2022, the note added.

Jerome Powell, the Fed chairman and Christine Lagarde, President of European Central Bank (ECB), spoke Wednesday at an ECB forum alongside Andrew Bailey and Haruhikokuroda from Bank of England. They said that while they had their eyes on inflation, they remain cautiously optimistic about the possibility of a temporary phenomenon.