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Stock Market
23 Nov 2021
Dollar Strengthens With Jerome Powell Reappointment
The Index Today
Fed chair Jerome Powell’s reappointment pushed the dollar higher after hawkish bets on rate hikes became firm. On Tuesday, the dollar peaked near a four and a half year high against the Japanese Yen.
The dollar went up to 114.97 against the yen, jumping by 0.77% on Monday. U.S president Joe Biden reappointed Jerome Powell for a second term with Lael Brainard as vice Fed chair. U.S treasury notes and treasury yields increased by 8.5 basis points on Monday, the highest number recorded since March last year.
The news of Jerome Powell’s reappointment helped firm up market sentiment regarding rate hikes and tapering of bond buying programs. Analysts at Westpac said, “Chair Powell nomination for a second term will leave markets comfortable pricing in Fed lift-off from July next year. At least three Fed officials have now openly discussed speeding up tapering too. Meanwhile, virus suppression measures are being implemented in Europe again, making for a stark contrast.”
In other market news, the euro was at $1.124 after losing 2.8% this month. The currency fell due to the dovish tone pursued by the European Central Bank after the resurgence of the coronavirus. The Australian dollar also slid down to $0.7228 with the dovish tone of the Reserve Bank of Australia.
