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Title: Dollar Up, Euro Falls as Number of European COVID-19 Cases Rise

Nov 21, 2021 10:44PM ET

By: AnalysisWatch

The dollar braced in Asia on Monday morning and remained just about at a 16-month high against the euro. Concerns about the rising number of COVID-19 cases in Europe led investors to turn to the U.S. as a safe haven.

The US Dollar Index, which tracks the greenback against a basket of other currencies, rose 0.15 percent to 96.175 by 10:37 PM ET (3:37 AM GMT), remaining close to the previous week's 16-month high of 96.266.

Bullish comments from Federal Reserve officials also boosted the US currency. Fed Vice Chairman Richard Clarida and Governor Christopher Waller commented on Friday that faster asset-stripping may be appropriate if the economic recovery accelerates and inflation rises. This could also mean raising interest rates earlier.

The euro fell 0.23% to $1.1274. EUR-USD is in freefall and is likely to get the lion's share of attention from clients looking for a play on the growing constraints and tensions in Europe.

The rising number of COVID-19 cases triggered a full lockdown in Austria, which began on Monday. German Health Minister Jens Spahn called the situation in the country a "national emergency", adding that vaccinations alone will not reduce the number of cases.

Meanwhile, the USD could continue its recent rally this week and reach a new high in 2021 if another round of strong US inflation can further drive the market's pricing in of Fed and USD rate hikes.

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