You are here: Home » International » News » Markets
Business Standard

Dollar jumps on Powell renomination, euro slips amid Covid concerns

The dollar set a 16-month high against the euro after Federal Reserve Chair Jerome Powell was nominated for a second term by President Biden

US Dollar | Euro | Jerome Powell

Karen Brettell | Reuters  |  NEW YORK 

united states

The dollar set a 16-month high against the on Monday after Federal Reserve Chair was nominated for a second four-year term by President Joe Biden, while the single currency was hurt by COVID-19 related lockdowns.

Lael Brainard, the Federal Reserve board member who was the other top candidate for the job, will be vice chair, the White House said.

"With Powell being renominated for a second term, that suggests a less dovish outlook for monetary policy than under a potential Brainard leadership," said Joe Manimbo, senior market analysts at Western Union Business Solutions in Washington.

"It looks like there's greater scope for U.S. rate hikes under Powell with Powell remaining on as the Fed Chair, and that has been broadly 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 since July 2020. The dipped 0.58% to $1.1233, also the weakest since July 2020.

The single currency was also dragged lower as concerns grew over new COVID-19 restrictions in Europe, with Austria entering another full lockdown and Germany considering following suit.

"It's kind of been a one-two punch for the One has been a rise in cases across the bloc, and what that is doing is reinforcing the decidedly dovish outlook for (European Central Bank) policy and that stands in stark contrast to the Fed, where pressure is building for the U.S. central bank to adopt a quicker pace of normalization," Manimbo said.

Powell and Brainard on Monday noted the corrosive impact that high inflation is having on the U.S. economy and American families in what may be a signal that controlling the rapid pace of price increases is now the central bank's top priority.

The Fed will release minutes from its Nov. 2-3 meeting on Wednesday, which will be evaluated for any new indications that it may speed up the taper of its bond purchases and hike rates sooner than expected.

Fed officials Richard Clarida and Christopher Waller on Friday suggested a faster pace of stimulus tapering may be appropriate amid a quickening recovery and heated inflation.

The dollar also gained 0.79% against the safe haven Japanese yen to 114.93, approaching the 4-1/2 year high of 114.97 reached on Nov. 17.

The greenback also gained 0.55% to hit a seven-week high of C$1.27 against the Canadian dollar.

"Given the possibility that more virus lockdowns are announced in the coming days and weeks, risk-sensitive currencies like the CAD may trade on the defensive while declining oil prices exert an additional drag," analysts at Scotiabank said in a report on Friday.


Graphic: World FX rates


Currency bid prices at 3:01PM (2001 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change


Dollar index 96.5280 96.1380 +0.42% 7.276% +96.5510 +96.0350

Euro/Dollar $1.1233 $1.1300 -0.58% -8.05% +$1.1296 +$1.1231

Dollar/Yen 114.9300 114.0200 +0.79% +11.26% +114.9500 +114.0550

Euro/Yen 129.10 128.63 +0.37% +1.72% +129.3200 +128.5700

Dollar/Swiss 0.9331 0.9288 +0.47% +5.48% +0.9333 +0.9268

Sterling/Dollar $1.3386 $1.3443 -0.43% -2.02% +$1.3449 +$1.3385

Dollar/Canadian 1.2700 1.2632 +0.55% -0.26% +1.2701 +1.2630

Aussie/Dollar $0.7226 $0.7237 -0.17% -6.08% +$0.7273 +$0.7225

Euro/Swiss 1.0482 1.0474 +0.08% -3.01% +1.0485 +1.0449

Euro/Sterling 0.8391 0.8393 -0.02% -6.11% +0.8403 +0.8381

NZ $0.6953 $0.7000 -0.66% -3.17% +$0.7013 +$0.6954


Dollar/Norway 8.9285 8.9020 +0.26% +3.94% +8.9630 +8.8970

Euro/Norway 10.0315 10.0588 -0.27% -4.16% +10.0932 +10.0082

Dollar/Sweden 8.9895 8.9523 +0.05% +9.66% +9.0137 +8.9349

Euro/Sweden 10.0985 10.0935 +0.05% +0.22% +10.1392 +10.0865


(Reporting by Karen Brettell; Editing by William Maclean and Will Dunham)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Tue, November 23 2021. 07:37 IST