Title: Dollar Up, Investors Ramp Up Bets on Earlier-Than-Expected Fed Interest Rate Hike

Nov 16, 2021 11:27PM ET

By: AnalysisWatch

The dollar reinforced in Asia on Wednesday morning and stayed almost a 16-month high. Investors also digested the latest US economic data and increased bets on an earlier-than-expected interest rate hike by the Federal Reserve.

The US dollar index, which tracks the greenback against a basket of other currencies, rose 0.14% to 96.043 by 11:20 PM ET, holding near its overnight high of 95.978, a level not seen since July 2020.

The USD/JPY pair rose 0.04% to 114.87.

The AUD/USD pair fell 0.33% to 0.7278. Australia's wage index rose 2.2% in the third quarter from a year earlier and 0.6% from a month earlier. Reserve Bank of Australia Governor Philip Lowe again contradicted market pricing for a 2022 rate hike, saying recent data did not justify the move.

The NZD/USD currency pair fell 0.03% to 0.6989.

The USD/CNY pair fell 0.05% to 6.3886 and the GBP/USD pair fell 0.07% to 1.3418.

US data released on Tuesday showed that retail sales rose 1.7% more than expected in October from the previous month. Retail sales also rose a stronger-than-expected 1.7%. However, St Louis Fed President James Bullard said on Tuesday that the Fed should "tack in a more hawkish direction" in preparation for higher inflation in the longer term.