Euro’s Pain Makes For Dollar’s Weekly Gain

Nov 20, 2021

Euro’s Pain Makes For Dollar’s Weekly Gain

On Friday, the dollar appeared set to make a second week of significant gains versus the euro as traders gambled on interest rates increasing quicker and further on the North Atlantic's western side, while sterling and the kiwi firmed as well.

The euro has been the most volatile currency this week, and after recovering to $1.1356 after falling to $1.1263, it remains vulnerable as fundamentals and positioning favor the dollar.

This week, the euro fell 0.7 percent, allowing the dollar index to increase 0.5 percent and reach a 16-month high. It was slightly shy of that last time, at 95.629.

"Previous post-GFC instances when the euro traded below $1.10 were accompanied by a large euro short position," according to Kit Juckes of Societe Generale.

"If the question is, 'will the market now get very short euros,' I believe the answer is yes, unless data improves drastically."

Following last week's inflation surprise, retail sales in the United States outperformed forecasts this week. Meanwhile, COVID-19 is soaring in Europe, auto sales are down for the fourth month in a row, and central bankers are pledging to keep rates low.

The focus will be on central bank speakers on Friday, with European Central Bank President Christine Lagarde speaking at 0830 GMT, Bank of England economist Huw Pill speaking at 1200 GMT, and Federal Reserve officials Christopher Waller and Richard Clarida speaking at 1545 GMT and 1715 GMT, respectively.

Another factor limiting movement is the assumption that US President Joe Biden would choose his Fed nominee before Thanksgiving on Nov. 25, with incumbent Jerome Powell and Governor Lael Brainard as frontrunners.

"If Powell is nominated, the market will purchase dollar/yen," said Brent Donnelly, trader and president of analytics company Spectra Markets. Powell is believed to adopt a somewhat more hawkish stance to rate setting in the face of inflation, according to Spectra Markets.

"Euro/dollar shorts are now large enough that a Brainard victory will be painful," Donnelly added. "I believe Brainard might see a 100 pip euro/dollar rise in one or two days."

LIRA, BITCOIN BATTERED

In developing markets, the Turkish lira has hit a new low, while bitcoin has dropped below $60,000 and is set to have its worst week in six months, with cryptocurrency mood shaky.

The yen, among other major currencies, was poised for a weekly loss of around 0.4 percent on Friday, though it had rebounded to 114.33 per dollar since hitting an almost five-year low of 114.97 a few days ago.

The widely shorted and commodity-sensitive Australian dollar is expected to lose a third week in a row, and has been weighed down by a drop in oil prices in recent days. At the time of writing, it was trading at $0.7278. [AUD/]

A spike in inflation to a 10-year high has firmed expectations on the Bank of England boosting rates in a month. Sterling has been the star performance among G10 currencies outside the dollar, rising around 0.5 percent to $1.3487.

The kiwi rose 0.7 percent on Thursday and has been stable for the week as traders bet on the RBNZ becoming more hawkish and raising rates by 50 basis points (bps) next week.

Swaps markets have put in a 40% possibility of a 50 basis point raise.

"Rates markets are still jittery, and the data drove the bellwether two-year swap to a new year high, putting the bid in behind the kiwi," ANZ Bank analysts said.

"With 36 basis points (of rises) priced in for next week and 198 basis points priced in over the following eight meetings, local markets may be in for a rude awakening if we 'only' receive a 25 basis point hike, as we expect."

Bitcoin was on track to have its worst week since May, with a 13 percent decline. At $57,033, it was at a three-week low.

Subscribe Our Newsletter

Robotics Startup FJDynamics Raises $70M To Make Manual Labor Easier
Robotics Startup FJDynamics Raises $70M To Make Manual Labor Easier

FJDynamics, created by DJI's former head scientist Wu Di, has secured a $70 million Series B financing to further its objective of empowering people in the hardest environments using robotic technology.

Companies
Digital Banking in UAE Revolutionizing Industry

Oto

Digital Banking in UAE: Innovation Setting Global Standards

Discover how the UAE leads Middle East banking with innovation, AI, and blockchain, setting global standards in digital transformation.

Banks and Finance
Get the ultimate solution: B2BinPay Get the ultimate solution: B2BinPay
Sponsored
Constantine

5 Most Successful FinTech Industry Startups in 2022
The financial services industry is undergoing a paradigm shift as a result of technological advancements, which are actively displacing traditional players and traditional business models. Significant changes are achieved through the integration of new financial solutions, reduction in the cost of certain functions, improvement in efficiency and quality of business, and a positive impact on the sustainability of core business development.

discover
Liquidity Provision in Crypto

Alexander

Liquidity Provision in Crypto: How Does It Work?

What exactly is liquidity, and how crucial is it for cryptocurrency markets? How do exchanges support liquidity on their platforms? And how do you guarantee liquidity in decentralised finance (DeFi), where the principle of decentralisation is central?

Liquidity
Contact us bg

Contact Us

Contact the Liquidity Provider
for any questions and advertising inquiries

    Please fill out this contact form to get in touch with us

    / 3000

    By clicking “Get in touch” button, you agree to the privacy policy

    Successful!
    Thank you for your request.
    We will contact you shortly.
    Close

    Constantine

    Best DAO Projects in 2025

    Best DAO projects in 2025

    Alexander

    Crypto Nodes That Pay: Your 2025 Guide to Top Passive Income Opportunities in Crypto

    crypto nodes that pay

    Alex

    Pi Network: Scam or Groundbreaking Crypto? The Full Analysis

    Pi Network Explained

    Constantine

    Triple Net Lease: Meaning, Benefits, and Strategies Explained

    Triple Net Lease

    Constantine

    Hanging Man Pattern: How to Identify and Trade It Effectively

    Hanging Man Pattern

    Alex

    5 Infinite Banking Mistakes That Could Cost You Thousands

    Infinite Banking Mistakes to Avoid

    Aleksander

    Solana Firedancer: Solving Solana’s Biggest Problems with a New Engine

    Solana Firedancer explained

    Alexander

    What Is an Interest Coverage Ratio? How to Use This Financial Metric to Evaluate Company Health

    Interest Coverage Ratio Explained

    Hazem

    After-Hours Trading: Can You Trade After Financial Markets Close?

    After-Hours Trading Explained

    Alexander

    How to Scale a Crypto Exchange Business and Stay Competitive

    how to scale crypto exchange business

    Constantine

    Crypto CrypticStreet Review: The Future of DeFi and Secure Crypto Trading

    Crypto CrypticStreet Review: The Future of DeFi and Secure Crypto Trading

    Alexander

    Bitcoin Power Law Explained: How It Shapes BTC’s Long-Term Growth

    Bitcoin Power Law Explained: How It Shapes BTC’s Long-Term Growth

    Hazem

    Megaphone Pattern​: What Is It? How to Use It In Trading

    Megaphone Pattern​: How to Read & Trade with It

    Constantine

    Top 5 Liquidity Bridge Providers in DeFi

    Top 5 Liquidity Bridge Providers in DeFi

    Hazem

    Max Funded IUL Explained: Is It a Legitimate Financial Strategy?

    Understanding Max Funded IUL

    Alexander

    Tax Refund Timeline: When Will You Get Your Tax Return?

    how long does it take for tax refund

    Constantine

    Crypto Liquidity — What is it, and How to Measure It?

    What is Crypto Liquidity and How to Measure It?

    Constantine

    AI in Finance: A Game-Changing Trend Shaping the Industry

    AI in Finance

    Hazem

    5 Ways to Make Money with ChatGPT and Build Your Wealth

    Make Money with ChatGPT

    Constantine

    Top AI Companies to Invest in April 2025

    Top AI Companies to Invest in March 2025

    DeepSeek vs ChatGPT: Which AI Technology is Better For You?

    DeepSeek vs ChatGPT: Feature-by-Feature AI Tool Comparison

    Constantine

    Top Solana Meme Coins in 2025: Best Presales and Where to Buy

    Solana Meme Coins 2025

    Alexander

    How Renewable Energy Stocks Can Supercharge Your Portfolio

    How Renewable Energy Stocks Supercharge Your Portfolio

    SEC Crypto Regulations: What Financial Advisors Need to Know

    SEC Crypto Regulations: Insights for Financial Advisors
    liquidity-provider-logo
    • News
      • Stock Market Forecast
      • Stocks
      • Banks and Finance
      • Companies
      • Crypto
      • Forex
      • AI
      • Technology
      • DeFi
      • NFT
    • Articles
      • Crypto Payments
      • Trading
      • Crypto Exchange Business
      • Forex Business
      • Fintech
      • Liquidity
      • FinTech Awards
      • Blockchain
      • Investing
      • NFT
      • DeFi
    • More
      • Videos
      • Liquidity Providers List
      • Crypto Payment Providers
      • White Label Brokerage Platforms
      • Broker CRM Platforms
    [email protected]

    © 2024 Liquidity Provider. All Rights Reserved

    Privacy Policy Cookie Policy
    This site is registered on wpml.org as a development site. Switch to a production site key to remove this banner.