FOREX-Dollar dips with U.S. Treasury yields but still up for week; bitcoin falls

BY Reuters | ECONOMIC | 01/21/22 03:57 PM EST
    (Updates to late New York trading)
    By Caroline Valetkevitch
    NEW YORK, Jan 21 (Reuters) - The dollar declined on Friday, along with U.S. Treasury yields, while
investors looked ahead to next week's Federal Reserve meeting for more clarity on the outlook for rate
hikes.
    Expectations that the Fed will tighten monetary policy at a faster pace than previously anticipated had
driven a rise in yields and the dollar earlier this week, and the U.S. dollar index was set for
biggest weekly percentage gain since mid-December.
    U.S. Treasury yields fell as stock market declines reflected poor risk appetite, while concerns about
potential conflict in Ukraine drove demand for the safe haven debt.
    Markets are pricing in as many as four rate hikes this year, starting from March and expect the Fed to
start trimming its $8 trillion-plus balance sheet within months. Next week's Fed meeting could shed some
light on how fast it will tighten.
    "Everything is going to be somewhat calm" until the Fed releases its statement on Wednesday after the
two-day meeting, said Bipan Rai, North American head of FX strategy at CIBC Capital Markets in Toronto.
    "It makes sense the dollar is somewhat muted today given the lack of real impetus from the data front."
    The dollar index, which tracks the greenback against major peers, was down 0.1% on the day at 95.650 but
up 0.5% for the week.
    In cryptocurrencies, bitcoin was also dragged lower and hit its lowest level since August. It
was last down 6%, while ether was down more than 8%.
    Against the yen, the dollar was last down 0.4% at 113.680. For the week, the dollar was down
about 0.5% against the yen. The euro was last up 0.3% against the dollar at $1.1341, while it was
down about 0.6% for the week.
    Retail sales in Britain added to recent weaker economic data. The pound was down 0.3% against the dollar
at $1.3553.
========================================================
    Currency bid prices at 3:39PM (2039 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct       High Bid    Low Bid
                                              Previous                   Change
                                              Session
 Dollar index                 95.6500        95.7650     -0.11%         -0.014%       +95.8400    +95.4910
 Euro/Dollar                  $1.1341        $1.1311     +0.27%         -0.24%        +$1.1360    +$1.1301
 Dollar/Yen                   113.6800       114.0900    -0.35%         -1.25%        +114.1500   +113.6000
 Euro/Yen                     128.93         129.04      -0.09%         -1.07%        +129.3000   +128.5700
 Dollar/Swiss                 0.9119         0.9173      -0.57%         -0.02%        +0.9172     +0.9108
 Sterling/Dollar              $1.3553        $1.3593     -0.29%         +0.22%        +$1.3602    +$1.3546
 Dollar/Canadian              1.2576         1.2504      +0.58%         -0.53%        +1.2579     +1.2498
 Aussie/Dollar                $0.7177        $0.7227     -0.69%         -1.27%        +$0.7229    +$0.7172
 Euro/Swiss                   1.0340         1.0374      -0.33%         -0.28%        +1.0377     +1.0336
 Euro/Sterling                0.8367         0.8315      +0.63%         -0.39%        +0.8376     +0.8316
 NZ                           $0.6712        $0.6755     -0.62%         -1.92%        +$0.6758    +$0.6708
 Dollar/Dollar
 Dollar/Norway                8.9030         8.8390      +0.89%         +1.23%        +8.9130     +8.8105
 Euro/Norway                  10.0906        9.9912      +0.99%         +0.78%        +10.1141    +9.9814
 Dollar/Sweden                9.2007         9.2234      -0.01%         +2.03%        +9.2434     +9.1534
 Euro/Sweden                  10.4342        10.4349     -0.01%         +1.96%        +10.4476    +10.3838


 (Additional reporting by Iain Withers and Sujata Rao in London and Kevin Buckland in Tokyo; Editing by Hugh
Lawson, Susan Fenton, Richard Chang and Marguerita Choy)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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