Dollar rises as COVID concerns spark flight to safety By Reuters

By John McCrank

NEW YORK (Reuters) – The greenback rose on Friday as traders sought secure havens after Austria mentioned it will be the primary nation in Western Europe to reimpose a full lockdown amid surging COVID-19 infections and Germany mentioned it may observe go well with, sending the euro decrease.

The , which tracks the dollar in opposition to a basket of six main currencies, was up 0.489% at 96.029, near the 16-month excessive of 96.266 hit on Wednesday. For the week, the greenback was up round 1%.

The euro, in the meantime, which has been on its again foot all week, hit a 16-month low amid the COVID surge in Europe and as expectations have grown that rates of interest will probably be hiked quicker elsewhere, significantly in the USA.

Federal Reserve Governor Christopher Waller mentioned the U.S. central financial institution ought to pace up the tempo of tapering its bond purchases to provide extra leeway to lift rates of interest from their near-zero stage ahead of it at present expects if excessive inflation and the energy of job features persists.

At a separate occasion, Fed Vice Chair Richard Clarida mentioned it “could very nicely be acceptable” to debate rushing up the Fed’s asset buy wind-down when it subsequent meets, on Dec. 14-15.

“The dollar proper now could be definitely benefiting from indicators of a strengthening U.S. financial system and from safe-haven flows as a consequence of renewed worries concerning the virus,” mentioned Joe Manimbo, senior market analyst at Western Union (NYSE:) Enterprise Options.

On prime of a lockdown, Austria mentioned it is going to require all its residents to be vaccinated in opposition to COVID-19 from Feb. 1, whereas Germany’s well being minister cautioned lockdown restrictions may return there.

“One factor is definite, if the entire of Europe needed to go underneath lockdown as soon as extra, and relying on how lengthy that may final, we would wish to rethink our progress eventualities,” mentioned Stephane Ekolo, international fairness strategist at brokerage Custom.

Commodity-linked currencies, such because the Australian, New Zealand and Canadian {dollars}, usually seen as dangerous, all declined.

The euro has fallen greater than 1% this week versus the greenback and was down 0.74% on the day at $1.12895, having earlier touched $1.1248, its weakest stage since July 2020.

European Central Financial institution President Christine Lagarde doubled down on her cautious place on Friday, saying the ECB shouldn’t tighten coverage as that might undermine restoration.

The was down 0.58% at $0.72335 and the was 0.72% decrease at $0.69945.

The Canadian greenback slid 0.42% to 1.2652.

The Japanese yen, additionally thought-about a safe-haven foreign money, strengthened following Austria’s lockdown announcement, and was up 0.22% versus the greenback at 113.99 yen.

Sterling shed a few of its latest features and was down 0.39% at round $1.3448.

In cryptocurrencies, bitcoin was beneath $60,000 and set for its worst week in six months, final buying and selling round $58,000.

($1 = 114.4500 yen)