# Dollar near one-week high as traders prepare for Powell, payrolls tests
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-11-30
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: US Dollar Sticks to One-Week High Ahead of Fed Chair
Meta Description: Stay updated with the latest on the U.S. dollar's performance near its one-week high, as investors await remarks from Federal Reserve Chair Jerome Powell
URL: https://financedigest.com/dollar-near-one-week-high-as-traders-prepare-for-powell-payrolls-testshtml

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By Kevin Buckland

TOKYO (Reuters) – The U.S. dollar stuck close to a one-week high on Wednesday, holding on to gains from a three-day rally, as investors braced for comments from Federal Reserve Chair Jerome Powell later and a crucial monthly [jobs report at the end of the week](https://www.financedigest.com/meta-plans-to-cut-thousands-of-jobs-as-soon-as-this-week-bloomberg-news.html "Meta plans to cut thousands of jobs as soon as this week – Bloomberg News").

The [euro hovered near a one-week low after German and Spanish consumer price figures came in weaker than expected, triggering a lowering of rate hike bets for the European Central Bank and pointing a spotlight at euro zone inflation](https://www.financedigest.com/dollar-trims-gains-vs-euro-after-u-s-inflation-data.html "Dollar trims gains vs euro after U.S. inflation data") due later Wednesday.

China’s offshore yuan traded near a one-week high as traders returned to wagering on a [reopening from strangling COVID-19](https://www.financedigest.com/freedom-day-sydney-reopens-as-australia-looks-to-live-with-covid-19.html "‘Freedom Day’: Sydney reopens as Australia looks to live with COVID-19") curbs.

The Aussie dollar, which often functions as a proxy trade on [China’s economic outlook](https://www.financedigest.com/oil-steadies-after-dipping-on-china-outlook-investors-await-fed-clues.html "Oil steadies after dipping on China outlook; investors await Fed clues"), was steady after shaking off downward pressure from lower than forecast local inflation data and worse-than-expected Chinese manufacturer surveys.

The U.S. dollar index, which measures the greenback against the euro and five other rivals, eased 0.13% to 106.72 after [reaching 106.9 in early Asian trading for the first time since](https://www.financedigest.com/soccer-arsenal-reach-womens-champions-league-semis-for-first-time-since-2013.html "Soccer-Arsenal reach Women’s Champions League semis for first time since 2013") Nov. 23.

The index has dipped to around 105.3 twice since the middle of the month, amid [bets the Fed would pivot from aggressive rate hikes](https://www.financedigest.com/dollar-hits-one-month-high-against-yen-as-traders-bet-on-fed-rate-hike.html "Dollar hits one-month high against yen as traders bet on Fed rate hike") after inflation showed signs it may be close to a peak.

Traders currently lay 63.5% odds that the [Fed will slow to a half-point pace of rate](https://www.financedigest.com/wage-data-dents-dollar-recovery-before-fed-rate-decision.html "Wage data dents dollar recovery before Fed rate decision") rises on Dec. 14, and 36.5% chance for another 75 basis point hike.

Closely watched non-farm payrolls figures due Friday are due to show 200,000 new jobs added in November, economists project, down from 261,000 in the previous month.

However, recent Fed speakers have all pushed back on expectations of a pivot, with New York Fed President John Williams on Monday saying the central [bank needs to press forward with rate rises](https://www.financedigest.com/sterling-rises-as-receding-bank-sector-worries-lift-sentiment.html "Sterling rises as receding bank sector worries lift sentiment") and St. Louis Fed President James Bullard [saying there is still “a ways to go” for policy](https://www.financedigest.com/yen-trims-gains-as-possible-next-boj-governor-says-current-policy-appropriate.html "Yen trims gains as possible next BOJ governor says current policy appropriate") tightening.

We expect Powell to talk up the need for tighter financial conditions (which) may cause market participants to reassess the global economic outlook and further [push the USD up,” Carol Kong](https://www.financedigest.com/citadel-accelerates-hiring-push-in-hong-kong-and-london.html "Citadel accelerates hiring push in Hong Kong and London"), a strategist at Commonwealth Bank of Australia, wrote in a client note ahead of Powell’s address later on Wednesday.

The [dollar slipped 0.07% to 138.60 yen](https://www.financedigest.com/yen-sinks-as-rates-outlook-diverges-nz-dollar-tumbles.html "Yen sinks as rates outlook diverges; NZ dollar tumbles"), as the pair continued to consolidate following a bounce from a three-month low of 137.50 on Monday.

The euro ticked up 0.15% to $1.03435, lifting from a one-week [low reached](https://www.financedigest.com/cheque-fraud-figures-reach-record-low.html "Cheque Fraud Figures Reach Record Low") earlier on Wednesday at $1.0319.

Sterling added 0.19% to $1.1976.

The Aussie rose 0.11% to $0.66945, consolidating in the middle of its range of the past couple of weeks. Optimism about a China reopening was balanced against an easing in Australian inflation, reducing the pressure for Reserve Bank [rate hikes](https://www.financedigest.com/uk-economys-unexpected-bounce-spurs-more-boe-rate-hike-talk.html "UK economy’s unexpected bounce spurs more BoE rate hike talk"), and weak Chinese purchasing manager surveys.

The [yuan weakened](https://www.financedigest.com/asia-shares-slip-dollar-strong-as-yuan-weakens.html "Asia shares slip, dollar strong as yuan weakens") slightly to 7.1418 per greenback.

[Chinese health officials said on Tuesday they will speed up COVID-19 vaccinations for the elderly](https://www.financedigest.com/chinese-fret-over-elderly-as-who-warns-of-holiday-covid-surge.html "Chinese fret over elderly as WHO warns of holiday COVID surge"), aiming to overcome a key stumbling block in efforts to ease unpopular “zero-COVID” curbs, which had sparked vigorous protests in recent days.

The relatively low vaccination rate among the elderly is a major hurdle to [China opening up its economy,” and plans](https://www.financedigest.com/dutch-responds-to-us-china-policy-with-a-plan-to-curb-semiconductor-tech-exports.html "Dutch responds to US China policy with a plan to curb semiconductor tech exports") to ramp that up “are an implicit acknowledgement by the government of the public discontent with the tight COVID controls,” said CBA’s Kong.

[“China’s zero COVID policy is undoubtedly the biggest source of uncertainty for its economic outlook.”](https://www.financedigest.com/lighting-maker-signify-cuts-2022-outlook-again-on-china-business-lighting.html "Lighting maker Signify cuts 2022 outlook again on China, business lighting")

(Reporting by Kevin Buckland; Editing by Lincoln Feast.)


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