The Wednesday morning in Asia started with the dollar prices going up. It peaked at a 16-month high. Investors raised bets on earlier than anticipated interest rates increase from the United States Federal Reserve. Moreover, investors also believed in the latest US economic data.
The US dollar index edged up to 96.043 by 0.14 per cent at 4:20 AM GMT (23:20 PM ET). Moreover, the index remained at that position with an overnight high of 95.978. Interestingly, it was for the first time the level was seen since July 2020.
The USD/JPY pair climbed to 114.87 by 0.04 per cent. The AUD/USD pair plunged to 0.7278 by 0.33 per cent. Meanwhile. Australia put out the wage data in the day earlier. The wage price index grew by 2.2 per cent year-on-year, while 0.6 per cent month-on-month respectively during the third quarter.
Philip Lowe, the governor of Reserve Bank of Australia pushed back against market pricing to hike the rate in 2022 with the move being justified by the recent data.
The NZD/USD pair edged down to 0.6989 by 0.03 per cent. The USD/CNY pair plunged to 6.3886 by 0.05 per cent and the GBP/USD pair depleted to 1.3418 by 0.07 per cent.
Meanwhile, the data released on Tuesday highlighted the growth in core retail sales. It did better than expected with a month-on-month increment of 1.7 per cent in October. Likewise, retail sales also witnessed a growth of 1.7 per cent.
On the other hand, James Bullard, president of St. Louis Fed said on Tuesday that it was required by the Fed to tack in a hawkish direction, that would help in preparing for long-term inflation.
Meanwhile, the rising cases of COVID-19 in Europe sent warning signals against the recovery of the economy.