Kevin Buckland

TOKYO (Reuters – Monday’s close to the top of its history against other major currencies was a result of a Federal Reserve official signaling that a Pandemic-era first interest rate rise could happen as early as March.

Following the Dutch lockdown, which took place on Sunday, the euro fell along with the British pound. Britain’s Health Minister declined to rule any further restrictions being placed before Christmas because of the rapid spread Omicron coronavirus variant.

The against six main peers was 96.629. It is close to the last month peak of 96.938.

According to the World Health Organization, Omicron cases are increasing in the areas with community transmission in the world. However, much more remains undiscovered about this variant of Omicron, such as its severity.

Chris Waller, Fed governor, said Friday that interest rates will likely rise “shortly after,” the bank’s March bond purchases.

“Waller gave (the dollar index) a tailwind Friday,” but the market is eyeing new highs. However, “positioning has been skewed long USDs so the prospect for position squaring into the year-end of the year is elevated,” Chris Weston of Pepperstone, Melbourne’s head of research, stated in a client letter.

Although central bank action is the most important issue, Omicron’s headlines can be seen as an indicator of position squaring.

As a safe-haven currency, the greenback has reached its highest level since Dec. 15, when it was against sterling, the euro and the more risky Australian dollar.

The dollar fell against the Japanese yen but is still within the middle range of its trading range for the three previous weeks.

Ten-year U.S. Treasury yields which often closely correlate with the dollar/yen pair languished at a near two-week low on Friday.

John Williams, the president of New York Fed told CNBC earlier on Friday that it will have “optionality” for raising rates by increasing interest rates by 2022 by cancelling bond purchases before March.

The odds of getting a quarter-point increase by March are roughly 50-50 in the money markets.

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Prices for currency bids at 0109 GMT

Description U.S. Close RIC Pct Change Pct High Low Bid

Changes in the past

Session

Euro/Dollar

$1.1245 $1.1236 +0.10% -7.94% +1.1255 +1.1235

Dollar/Yen

113.5950 113.7400 -0.12% +9.98% +113.6500 +113.5400

Euro/Yen

127.75 127.77 -0.02% +0.65% +127.8200 +127.6200

Dollar/Swiss

0.9238 0.9241 -0.06% +4.39% +0.9244 +0.9234

Sterling/Dollar

1.3232 1.3233 +0.02% -3.13% +1.3243 +1.3225

Dollar/Canadian

1.2891 1.2894 -0.01% +1.25% +1.2901 +1.2886

Aussie/Dollar

0.7121 0.7127 -0.06% -7.41% +0.7134 +0.7109

NZ

Dollar/Dollar 0.6731 0.6737 -0.07% -6.25% +0.6750 +0.6726

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Volatilities

Tokyo Forex Market Information from BOJ