· Dollar hits 16-month high as inflation fears set it up for best week since June
The U.S. dollar headed for its best week in almost five months against major peers on Friday, amid bets for earlier Federal Reserve interest rate hikes after data this week showed the fastest U.S. inflation in three decades.
The dollar index, which measures the currency against six peers, hit a fresh 16-month high of 95.266, on track for a 1.05% gain this week, the most since the period ended June 20.
The euro slipped back to a 16-month low at $1.1436, and sterling dipped to $1.3354, its weakest level this year.
Data on Wednesday showed a broad-based rise in U.S. consumer prices last month at the fastest annual pace since 1990, calling into question the Fed’s contention that price pressures will be “transitory” and fuelling speculation that policymakers would lift interest rates sooner than previously thought.
Markets now price a first rate increase by July and a high likelihood of another by November.
Traders will be watching inflation readings from a University of Michigan survey, along with JOLTS job openings data later in the global day.
New York Fed president John Williams speaks at an online conference, potentially offering a glimpse of how policymakers are reacting to the red-hot inflation print.
European Central Bank chief economist Philip Lane also speaks on a panel at a separate event.
The dollar rose as high as 114.30 yen on Friday, the strongest since Nov. 1.
· London copper falls as dollar strengthens on rate-hike bets
Prices of copper, which is often used as a gauge of the global economic growth, declined in London on Friday as the dollar was poised for its best week in almost five months against major peers on bets of an earlier-than-expected U.S. interest rate.
Three-month copper on the London Metal Exchange was down 0.3% at $9,608 a tonne, as of 0558 GMT, while the most-traded December copper contract on the Shanghai Futures Exchange rose 0.4% to 70,550 yuan ($11,030.85) a tonne.
Reference: Reuters
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