- U.S. dollar index up 0.6%
- Euro down 0.6%
- Sterling falls 0.5%
- Aussie falls 0.6%
(New throughout, updates prices, market activity; previous NEW YORK/LONDON)
The dollar rose on Friday as traders retreated from riskier currencies amid talk of interest rate hikes by central bankers and concerns about the spread of Omicron cases.
The dollar index =USD against major currencies was up nearly 0.6% in afternoon trading in New York, recouping all of the value it had lost on Thursday following a series of central bank policy statements.
The euro and British pound fell 0.6% and 0.5%, respectively, after having booked gains the two previous days. The euro stood at $1.1257 EUR=EBS and the pound at $1.3253 GBP=D3 at 1847 GMT.
Commodity-linked currencies, including the Australian and Canadian dollars, also lost value as crude oil prices fell 2% on worries that Omicron variant will dampen demand.
The Aussie fell 0.6% to $0.7138. AUD=D3 The dollar gained 0.7% against the loonie to 1.2862. CAD=D3
The dollar was flat against the Japanese yen. JPY=EBS The risk of reinfection with the Omicron coronavirus variant is more than five times higher than the Delta variant and has shown no sign of being milder, a new study from England showed. The findings were released as European countries weigh further travel and social restrictions.
In the United States, Federal Reserve Governor Chris Waller said an interest rate increase will likely be warranted "shortly after" the Fed ends its bond purchases in March.
Earlier, New York Fed president John Williams, told CNBC that the Fed will gain "optionality" to raise interest rates in 2022 by ending bond purchases by March.
Traders are comparing changing interest rates across currencies as central banks go at different speeds to adjust monetary policies in the face increasing signs of persistently high inflation and the Omicron threat.
The spread between yields on two-year government securities of the United States and Germany widened through the day US2DE2 to its biggest gap in a week and reflected the euro's weakness.
Some analysts have cautioned against reading too much into changes in exchange rates at this stage.
With the central bank meetings out of the way, "we think there will be little informational value in price action in coming days," strategists at TD Securities said in a note to clients on Thursday.
"The USD can consolidate into year-end as FX markets work off some residual positioning/value excesses," they added.
The dollar index, at 96.5240, is up about 8% since May. Among cryptocurrencies, bitcoin BTC=BTSP slipped 2% to $46,762.
======================================================== Currency bid prices at 1:47PM (1847 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Dollar index =USD 96.5240 95.9770 +0.58% 7.272% +96.5490 +95.8750 Euro/Dollar EUR=EBS $1.1257 $1.1331 -0.64% -7.86% +$1.1349 +$1.1255 Dollar/Yen JPY=EBS 113.7400 113.7100 +0.02% +10.08% +113.8550 +113.1450 Euro/Yen EURJPY= 128.04 128.82 -0.61% +0.88% +128.9700 +128.0000 Dollar/Swiss CHF=EBS 0.9241 0.9194 +0.54% +4.48% +0.9243 +0.9175 Sterling/Dollar GBP=D3 $1.3253 $1.3323 -0.53% -2.99% +$1.3339 +$1.3253 Dollar/Canadian CAD=D3 1.2862 1.2772 +0.71% +1.01% +1.2866 +1.2773 Aussie/Dollar AUD=D3 $0.7138 $0.7183 -0.64% -7.23% +$0.7183 +$0.7136 Euro/Swiss EURCHF= 1.0403 1.0413 -0.10% -3.74% +1.0420 +1.0395 Euro/Sterling EURGBP= 0.8493 0.8501 -0.09% -4.97% +0.8528 +0.8493 NZ NZD=D3 $0.6743 $0.6802 -0.87% -6.11% +$0.6801 +$0.6741 Dollar/DollarDollar/Norway NOK=D3 9.0275 9.0045 +0.27% +5.14% +9.0290 +8.9700 Euro/Norway EURNOK= 10.1630 10.1801 -0.17% -2.90% +10.2108 +10.1390 Dollar/Sweden SEK= 9.1190 9.0371 +0.29% +11.26% +9.1197 +9.0182 Euro/Sweden EURSEK= 10.2656 10.2363 +0.29% +1.88% +10.2903 +10.2256 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates https://tmsnrt.rs/2RBWI5E^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
