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Tuesday, December 7, 2021
Trading

Dollar rises, euro drops as Europe Covid cases rise

euro drops

The U.S. Dollar Index inched up 0.15% to 96.175, while euro was 0.23% lower at $1.1274

The dollar was up on Monday morning in Asia, staying near a 16-month high against the euro. Worries over the growing numbers of Covid cases in Europe also saw investors turn towards the safe-haven U.S. currency.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched up 0.15% to 96.175 by 3:37 AM GMT. It stayed near the 16-month high of 96.266 hit during the previous week.

The USD/JPY pair inched up 0.17% to 114.18.

The AUD/USD pair inched up 0.10% to 0.7242 while the NZD/USD pair dropped 0.31% to 0.6988. The Reserve Bank of New Zealand (RBNZ) will hand down its policy decision on Wednesday.

The USD/CNY pair edged down 0.03% to 6.3845 and the GBP/USD pair inched down 0.15% to 1.3432.

Bullish comments from U.S. Federal Reserve officials also boosted the U.S. currency. Fed Vice Chairman Richard Clarida and Governor Christopher Waller on Friday suggested that faster asset tapering could be appropriate as economic recovery quickens and inflation rises. This could also mean earlier interest rate hikes.

The euro was 0.23% lower at $1.1274.

EUR-USD has been in free-fall and will likely get the lion’s share of attention from clients looking for a play on growing restrictions and tensions across Europe, Pepperstone head of research Chris Weston said a note.

For momentum, trend followers, and tactical traders, short EUR remains attractive here, he said.

The surging numbers of Covid cases triggered a full lockdown in Austria that begins on Monday. German Health Minister Jens Spahn called the situation in the country a national emergency, adding that vaccinations alone will not reduce the numbers.

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