© Reuters. File photo: Money changer calculates U.S. dollar bills at the currency exchange office in Ankara, Turkey, on November 11, 2021. REUTERS/Cagla Gurdogan
LONDON (Reuters)-The U.S. dollar rose against major currencies as optimistic market sentiment on Monday boosted European stock markets and government bond yields on the first trading day of 2022.
However, as the major European foreign exchange trading center London is closed due to market holidays, trading volume is expected to remain limited.
Although the surge in coronavirus cases caused by the Omicron variant continues to disrupt global travel and public services, people are hoping to avoid economic losses caused by the strict lockdown.
The U.S. dollar index, which measures the U.S. dollar against major currencies, rose 0.12% to 95.79, while the pan-European index hit a record high. US stock index futures showed a positive Wall Street trading day.
The yen briefly fell to 115.36, the lowest since the end of November, against the dollar, but gradually climbed to 115.15.
The euro fell 0.21% to 1.1345 US dollars, while the German 10-year benchmark yield briefly rose by about 4 basis points to -0.138%, the highest level since November.
A survey showed that supply bottlenecks hindered German manufacturing activity in December, but manufacturers with sufficient orders expressed confidence that these problems would be alleviated by 2022.
“German manufacturers are confident about their growth prospects in the coming year, but a large extent still depends on improved supply conditions,” said Phil Smith, deputy director of the Ministry of Economic Affairs, in an IHS Markit PMI survey on Monday.
In the wider Eurozone, manufacturing activity remains resilient as factories take advantage of the alleviation of supply chain constraints and stock up raw materials at a record rate.
The massive issuance of government bonds in the Eurozone is also expected to put upward pressure on yields.
The market expects that the European Central Bank will maintain a dovish stance, while the Federal Reserve and the Bank of England will tighten monetary policy.
The pound fell 0.05% to 1.3517 US dollars.
Turkey’s annual inflation rate in December was much higher than expected, with a year-on-year increase of 36.08%, the highest level since September 2002, reflecting the sharp drop in the lira at the end of 2021.
After the data was released, the exchange rate of the lira against the US dollar was 13.4, down 1.7% on the day, but it was off the early low of 13.92. After the turmoil in November and December, it fell 44% last year.[L8N2TJ0NC)(L8N2TJ0NC)[L8N2TJ0NC)[L8N2TJ0NC)
It fell 0.5% to US$47,104.
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