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The greenback extended its recent winning streak and rose to fresh 16-month highs against its peers on Wednesday as hawkish comments from Federal Reserve officials increased speculation that the Fed will tighten monetary policy as well as raise rate in a faster pace than expected.
Reuters reported San Francisco Federal Reserve Bank President Mary Daly said on Wednesday she could see the argument for accelerating the pace of the central bank’s taper and would be open to doing so if inflation remains elevated and jobs growth stays strong. “If things continue to do what they’ve been doing, then I would completely support an accelerated pace of tapering,” Daly said during an interview with Yahoo Finance published on Wednesday. Daly said she would like to see more economic reports on inflation and hiring and to discuss the approach with her Fed colleagues before deciding.
More from Reuters, the new orders for U.S.-made capital goods increased solidly in October, suggesting a rebound in business spending on equipment early in the fourth quarter. Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, rose 0.6% last month, the Commerce Department said on Wednesday. These so-called core capital goods orders gained 1.3% in September.
Economists polled by Reuters had forecast core capital goods orders climbing 0.5%. Part of the increase last month likely reflected higher prices amid global shortages of goods.
Versus the Japanese yen, dollar met renewed selling at 115.23 in Asian morning and dropped to session lows at 114.83 in early European morning. However, price erased its losses and rallied to a fresh 3-year peak at 115.51 in New York on usd’s broad-based strength before stabilising.
The single currency remained under pressure in Asia and dropped below Tuesday’s 1.1227 low to 1.1204 in European morning. The pair continued to ratchet lower and hit a fresh 16-month trough at 1.1187 in New York morning on usd’s continued strength before staging a short-covering rebound to 1.1205.
The British pound traded sideways in Asia before edging up to session highs at 1.3389 at European open on cross-buying of sterling especially vs euro. However, the pair then met renewed selling there and fell to a fresh 10-month trough at 1.3317 in New York afternoon before trading sideways.
According to Reuters, British industrial orders surged this month with a growth measure hitting its highest since at least 1977 and price expectations among manufacturers also climbed to a 44-year high, according to a survey published on Wednesday.
The Confederation of British Industry’s monthly manufacturers’ order book balance leapt to +26 in November from +9 in October, well above the average forecast of +13 in a Reuters poll of economists. The reading was the highest since the CBI series started in April 1977.
Data to be released on Thursday:
New Zealand imports, trade balance, exports, Australia capital expenditure, building capex, Japan coincident index, leading indicator, Germany GDP, Gfk consumer sentiment, Italy trade balance, U.S. Market Holiday and Canada average weekly earnings.