Dollar gains on rate hike bets ahead of jobs data

Friday,   03-Dec-2021   03:32 PM (IST)

The dollar gained on Friday against most major currencies as traders positioned ahead of key U.S. jobs data that could clear the path for an earlier rate hike by the Federal Reserve. Fed officials speaking on Thursday joined Chair Jerome Powell in striking a hawkish stance, with San Francisco Fed President Mary Daly saying it may be time to "start crafting a plan" to raise rates to combat inflation, and Richmond Fed President Thomas Barkin throwing his support behind "normalising policy." At the same time, the continued spread of the Omicron coronavirus variant globally has buoyed safe-havens like the dollar and yen and put pressure on riskier currencies over the past week. The dollar index , which measures the greenback against six major peers, gained 0.2% to 96.283, setting it up for a weekly advance. That would be a sixth weekly gain, the longest stretch since January 2015. Money markets see high odds of the Fed raising the target rate by a quarter point at its June meeting. Powell reiterated in testimony to Congress on Wednesday that he and fellow policymakers will consider swifter action at their Dec. 14-15 meeting. The dollar rose 0.2% to 113.40 versus the Japanese yen. The euro dippped 0.1% to $1.1291, consolidating after its drop to an almost 17-month low at $1.1186 last week. The Aussie dropped 0.5% to a new 13-month low of $0.7055, falling for a fourth consecutive session. Both the European Central Bank and Reserve Bank of Australia, which decides policy on Tuesday, have stuck to dovish stances, pushing back against market bets that policymakers will be forced to bow to inflationary pressures. Sterling slipped 0.2% to $1.3271.