By Gina Lee

Investing.com – The dollar was up on Wednesday morning in Asia, remaining near a 16-month peak. Investors also digested the latest U.S. economic data and raised bets for an earlier-than-expected interest rate hike from the U.S. Federal Reserve.

At 23:20 GMT (4:20 AM GMT), The Index that monitors the greenback against various currencies increased 0.14% to 96.043 (or 0.042%) It remained close to a new overnight record of 95.978. This is a mark not reached since July 2020.

This pair climbed 0.04% to 112.87.

It was 0.7278, or 0.33% lower. Australia published wage data earlier today. The index of wage prices increased by 2.2% and 0.6% respectively during the third quarter. Philip Lowe, Governor of the Reserve Bank of Australia, argued again against market pricing in support of a 2022 rate increase. However, recent data does not support this move.

This pair fell 0.03% to 0.6989.

They fell by 0.05% at 6.3886 while they dropped by 0.07% in 1.3418.

The October data showed that retail sales grew 1.7% more than expected month-on-month. Also, retail sales grew by 1.7% more than expected. James Bullard, president of the St. Louis Fed said Tuesday that the Fed needed to “take a more hawkish approach” as he hoped for higher inflation in the long-term.

According to Westpac analysts, “The U.S. economic recovery appears to be complete” and that the supply chain problems and bottlenecks are being resolved, they recommend buying the dollar index if the level drops below 95.

“Hawkish comments from Bullard, who is a voter in 2022, will leave markets comfortable pricing in Fed hikes in that year, a stark contrast with Europe where renewed COVID-19 suppression measures are being implemented.”

Across the Atlantic, rising numbers of COVID-19 cases in Europe triggered worries about the continent’s economic recovery from COVID-19. Germany will vote Thursday on tighter measures to stop its spread after Austria placed an embargo on those who were not yet vaccinated earlier this week.

Christine Lagarde (ECB President) will address the audience later in day. Isabel Schnabel (ECB member) will also be present at a separate event.

The U.K. will release its consumer price index later today. This could support the Bank of England in tightening its monetary policy.