Breaking News
Close
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Dollar starts off 2022 on higher note as yields climb

ForexJan 03, 2022 20:07
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A money changer counts U.S. dollar banknotes at a currency exchange office in Ankara, Turkey November 11, 2021. REUTERS/Cagla Gurdogan

By Chuck Mikolajczak

NEW YORK(Reuters) - The U.S. dollar rose against a basket of major currencies on Monday, the first trading day of the new year, in sync with government bond yields as investors anticipate the Federal Reserve will stay on its path of interest rate hikes in 2022.

While the surge in coronavirus cases caused by the Omicron variant continued to impact global travel and public services, investors remained optimistic that lockdowns would be averted.

On Monday, the U.S. Food and Drug Administration authorized the use of a third dose of the Pfizer (NYSE:PFE) and BioNTech COVID-19 vaccine for children aged between 12 and 15 years, and narrowed the time for all booster shots to five months from six months after primary doses.

Yields on U.S. two-year notes, which are sensitive to rate hike expectations, along with 5-year notes, soared to their highest level since March 2020. Benchmark U.S. 10-year and 5-year yields rose to six-week peaks. The U.S. central bank is seen as likely to begin hiking interest rates by mid-2022.

"Markets in general have a short attention span when it comes to anything COVID related and it has been this way since the very beginning," said Erik Bregar, president and CEO at Bregar Capital Corp in Toronto.

"I don’t feel a risk-off vibe today because oil is steady, stocks are still green... right now yields are the driver."

The dollar index rose 0.552%, with the euro down 0.64% to $1.1295.

The greenback was on track for its biggest daily percentage gain since Dec. 17.

Economic data showed a gauge of manufacturing for December by Markit dipped to 57.7 from its prior reading of 57.8, but still indicating expansion. November construction spending rose 0.4%, shy of expectations calling for a rise of 0.6%.

The Japanese yen weakened 0.17% versus the greenback at 115.27 per dollar, while sterling was last trading at $1.3482, down 0.35% on the day.

Trading volumes, however, were expected to be thin as London, Europe's main FX trading center, is closed for a market holiday.

In the broader euro zone, manufacturing activity remained resilient as factories took advantage of an easing in supply chain constraints and stocked up on raw materials at a record pace.

Turkey's annual inflation rate surged to 36.1% last month, its highest in the 19 years Tayyip Erdogan has ruled, laying bare the extent of a currency crisis caused by the president's unorthodox interest rate-cutting policies.

The Turkish lira was last trading up 1.7% at 12.960 per dollar, but off an early low of 13.92.

Bitcoin BTC=BTSP last fell 1.61% to $46,587.63.

Dollar starts off 2022 on higher note as yields climb
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Our Apps
DOWNLOAD APPApp store
Investing.com
© 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
  • Sign up for FREE and get:
  • Real-Time Alerts
  • Advanced Portfolio Features
  • Personalized Charts
  • Fully-Synced App
Continue with Google
or
Sign up with Email