The dollar hit a 16-month high against the euro on Monday after Federal Reserve Chairman Jerome Powell was nominated for a second four-year term by President Joe Biden, while the single currency suffered due to COVID-19 restrictions.
According to a White House statement, Lael Brainard, a member of the Federal Reserve's board of directors who was the other main candidate for the job, will be the vice-chairman.
"With Powell's reappointment to a second term, it suggests a less" dovish "view of monetary policy than under Brainard's potential leadership," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
"There seems to be more scope for US rate hikes under Powell when Powell remains Fed chairman, and that's generally positive for the dollar," Manimbo added.
The dollar index against a basket of currencies rose 0.42% on the day to 96.53, the highest level since July 2020. The euro fell 0.58% to $1.1233, also the lowest since July 2020.
The single currency was also down as fears grew over new COVID-19 restrictions in Europe, with Austria imposing another full isolation and Germany considering following suit.
"This is kind of a blow to the euro. One is an increase in the number of cases across the bloc, and what that does is reinforce a decidedly dovish policy outlook for (the European Central Bank), in stark contrast to the Fed, where there is increasing pressure on the US central bank to normalise more quickly," Manimbo said.
On Monday, Powell and Brainard noted the devastating impact that high inflation is having on the US economy and American families, which could be a signal that controlling rapid price growth is now the central bank's top priority.
The Fed will release the minutes of its 2-3 November meeting on Wednesday, which will assess any new signs that the Fed could accelerate its bond-buying cuts and rate hikes earlier than expected.
Fed officials Richard Clarida and Christopher Waller suggested on Friday that a faster pace of stimulus cuts could be appropriate amid an accelerating recovery and hot inflation.
The dollar, as seen in https://exness-ex.com/login/ analysis, also rose 0.79% against the Japanese yen shelter to 114.93, approaching the 4-1/2 year high of 114.97 reached on November 17.
The dollar was also up 0.55%, hitting a seven-week high of CAD1.27 against the Canadian dollar.
"Given the likelihood that new virus lock-ins will be announced in the coming days and weeks, risk-sensitive currencies such as the CAD could trade defensively, while lower oil prices will provide additional resistance," Scotiabank said in a report on Friday.
This looks so fun! We don't do one-on-one activities with our kids enough, but you've definitely made me want to, even if this post is about a family walk! Now that it's cooling down we like going on walks in the evening before bed, and it has been so nice just to get out of the house! We'll have to try those Clif bars! The Oatmeal Cookie one sounds amazing!
I've missed your blog. So happy that I thought to check out your fb page and come visit. I'm never disappointed. Your free printable is the cutest thing ever. My children would love to do this daily.
How about winter walks though, you participate in those?! ? Oh wait... You're in Arizona (or somewhere) with sunshine year round. It's about to be a blizzard mess with snow to my waist in a couple months!!! =) Lol
Monica, long time no see!! I'm glad to hear you're doing well! Haha we definitely don't have to deal with blizzards but we have the opposite, 115 degree summer days, so I feel ya on certain parts of the year being near impossible to go on walks. Actually I feel like our "winter" months are coming to an end and we can finally venture outside without it feeling like an oven haha! ?
We are big on family walks. All great benefits, especially getting some of that energy out, haha!
My kids and I love going on walks! But, our neighborhood isn't really the best for it. It isn't horrible, but it's not particularly safe either. I'm hoping that by this time next year, we will be in a new house and in a new, family-friendly neighborhood. Then we will be walking all the time!
I hope you are too Marietta! I could definitely understand that situation, I've lived in some places before that were safe but were just...questionable haha.
Hi Jessica! Family walks are the best ? We have some of the best conversations with the girls when we go on walks. We definitely need to do them more often
Thanks for sharing us,