© Reuters

By Gina Lee

Investing.com – The dollar was up on Wednesday morning in Asia, remaining near a 16-month peak. Investors also digested the latest U.S. economic data and raised bets for an earlier-than-expected interest rate hike from the U.S. Federal Reserve.

The that tracks the greenback against a basket of other currencies edged up 0.14% to 96.043 by 23:20 PM ET (4:20 AM GMT). The index remained near an overnight high of 95.978, a level not seen since July 2020.

The pair inched up 0.04% to 114.87.

The pair was down 0.33% to 0.7278. Australia released wage data earlier in the day, with the wage price index growing 2.2% and 0.6% and respectively in the third quarter. Reserve Bank of Australia governor Philip Lowe again pushed back against market pricing for a rate hike in 2022, with recent data not justifying the move.

The pair inched down 0.03% to 0.6989.

The pair inched down 0.05% to 6.3886 and the pair inched down 0.07% to 1.3418.

U.S. data released on Tuesday showed that grew by a better-than-expected 1.7% month-on-month in October. Retail sales also grew a better-than-expected 1.7%. However, St. Louis Fed president James Bullard said on Tuesday that the Fed should “tack in a more hawkish direction” in preparation for longer-term high inflation.

“The U.S. economy looks to have shaken off the COVID-19 Delta variant soft patch and is regaining forward momentum, albeit with heavy ongoing supply chain issues and reopening bottleneck,” Westpac analysts said in a note, recommending buying the dollar index on any dips into the low 95 level.

“Hawkish comments from Bullard, who is a voter in 2022, will leave markets comfortable pricing in Fed hikes in that year, a stark contrast with Europe where renewed COVID-19 suppression measures are being implemented.”

Across the Atlantic, rising numbers of COVID-19 cases in Europe triggered worries about the continent’s economic recovery from COVID-19. Germany will vote on Thursday on stricter measures to curb its outbreak after Austria imposed a lockdown on unvaccinated people earlier in the week.

European Central Bank (ECB) President Christine Lagarde will speak later in the day, with ECB board member Isabel Schnabel also speaking at a separate event.

Elsewhere in Europe, the U.K. releases its consumer price index later in the day, which could provide further support to the Bank of England tightening its monetary policy.

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