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Dollar Up, Euro Near Three-Week High as Central Banks Continue Hawkish Tone -Breaking


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By Gina Lee – The dollar was up on Monday morning in Asia, with the euro near a three-week high hit during the previous week. Investors continued to digest the European Central Bank (ECB)’s hawkish turn while saying further short-term gains are less likely as the U.S. Federal Reserve’s imminent interest rate provided support to the dollar.

This chart tracks the greenback’s performance against a basket currency. It was at 9:03PM ET (4:03 GMT) and had risen 0.07%.

This pair climbed 0.07% to 115.22.

With Australia’s release earlier in the morning, the pair climbed 0.04% to 0.7078. The pair fell 0.05% to 0.6616.

This pair dropped 0.44% to 6.33328. The January figure was 51.4.

It fell by 0.02%, to 1.3527.

Investors are now awaiting U.S. Inflation data due Thursday. An increase in the probability of a Fed rate rise in March 2022 could be fueled by a strong reading.

Euro traded at $1.1451, just below the $1.4183 high reached during the week before and close to the levels that were last seen in mid-January 2022. A strong U.S. employment report gave the dollar a boost after a rough week.

In January, they were 460,000 and 4% respectively. Some investors believe that the safe-haven U.S. dollar could see additional gains.

We see more upside for the dollar in the short-term, if the interest rate market prices a higher chance of 50bp increases in March. But the previous week’s hawkish turn by ECB President Christine Lagarde suggests any upside in the dollar will be capped,” Commonwealth Bank of Australia (OTC:) head of international economics Joe Capurso said in a note.

In the short term, “with little fresh information from Europe likely this week to further boost market pricing for ECB hikes, material further upside to the euro is unlikely,” the note added.

The market is pricing in the possibility that the Fed will raise interest rates in March. There’s a good chance rates could reach 1.5% before 2022.

Two-year U.S. yields were nearing a two year high of 1.32% Monday while the benchmark yields for 10-years were at 1.9049%.

Investors will now be waiting for speeches from the Fed and ECB throughout the week. Klaas Knot (president of Dutch Central Bank and a member of the governing council of the ECB) stated on Sunday that he anticipates a rise in interest rates for the fourth quarter 2022.

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