The Dollar is Rising And is Waiting For Positive Headlines

The dollar rose in early European trading on Monday at the start of a week that includes several central bank meetings, including the Federal Reserve. At the same time, concerns remain about the omicron mutating from Covid.

The dollar index, which measures the greenback against a basket of six other currencies, was up 0.2% at 96.243.

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USDJPY also rose 0.1% to 113.52, EURUSD fell 0.2% to 1.1286, and risk-sensitive USDAUD fell 0.2% to 0.7154.

GBPUSD also fell 0.3% to 1.3230 after British Prime Minister Boris Johnson warned on Sunday that Britain was facing a “tidal wave” of the Covid-19 mutated Omicron, which accelerated the country’s booster program to try to contain Virus damage.

While the Bank of England is one of the major central banks scheduled to hold policy-setting meetings this week, these new virus fears are expected to prompt the central bank to exercise caution, pushing back the first interest rate increase since the pandemic through 2022.

There are also scheduled ECB and BoJ meetings, but the two-day Federal Reserve meeting, which ends on Wednesday, attracts the most attention.

Also, there are high expectations that the Fed will announce a faster cut in asset purchases this week, and thus an early start to raise interest rates, especially after President Jerome Powell’s upbeat speech to Congress and with the US CPI announcing its biggest annual gain since 1982 on Friday.