2021.11.2216:48:00UTC+00U.S. Dollar Spikes Higher After Biden Picks Powell As Fed Chief

The U.S. dollar outperformed against its major counterparts in the New York session on Monday, after President Joe Biden nominated Federal Reserve chief Jerome Powell for a second term to combat inflation and the lingering effects of the pandemic that could derail the global recovery.

The White House also revealed that Biden has nominated current Fed Governor Lael Brainard as Vice Chair of the Federal Reserve System.

The White House said that economic recovery "is a testament to the success of the President's economic agenda, and it is a testament to decisive action by Chair Powell and the Federal Reserve to cushion the impact of the pandemic and get America's economy back on track."

Biden expressed confidence that Powell and Brainard's focus on keeping inflation low, prices stable, and delivering full employment will make the economy stronger than ever before.

The currency was further underpinned by comments from Fed Vice Chairman Richard Clarida and Fed Governor Christopher Waller last week, which intensified hopes for an earlier tightening of monetary policy.

Clarida said that the economy is "in a very strong position" and a faster tapering of the QE program is on the cards.

Waller urged to accelerate the pace of the tapering in the wake of the rapid improvement in the labour market and the hot inflation data.

Investors also await U.S. durable goods orders, GDP data, personal consumption expenditure price index and Fed minutes due this week for more direction.

Data from the National Association of Realtors showed that U.S. existing home sales increased unexpectedly in the month of October.

NAR said existing home sales climbed 0.8 percent to an annual rate of 6.34 million in October after spiking by 7.0 percent to a rate of 6.29 million in September.

The currency has been trading in a positive territory in the European session.

The greenback rose to its highest level since June 2020 versus the euro, at 1.1236. The pair had ended Friday's trading session at 1.1281. Further rally in the currency may challenge resistance around the 1.10 region.

Preliminary data from the European Commission showed that euro area consumer confidence deteriorated for a second straight month and at a faster than expected pace in November to its lowest level in seven months.

The flash Eurozone consumer confidence index fell to -6.8 from -4.8 in October. Economists had forecast a score of -5.5.

The greenback was up against the pound, at a 10-day high of 1.3390. The pair was worth 1.3442 when it closed deals on Friday. Should the currency rallies again, 1.32 is possibly seen as its next resistance level.

The greenback appreciated to a 5-day high of 114.74 against the yen from last week's close of 113.98. The greenback may face resistance around the 118.00 region.

The greenback moved up to a 5-day high of 0.9312 against the franc, up from last week's close of 0.9286. The greenback is likely to challenge resistance around the 0.95 level.

The greenback strengthened to 1.2690 against the loonie, a level unseen since October 1. The pair had finished Friday's deals at 1.2636. Immediate resistance for the dollar is likely seen around the 1.29 level.

The greenback bounced off to 0.7238 against the aussie, from a low of 0.7274 seen at 8:45 am ET. The greenback was worth 0.7227 per aussie at Friday's New York session close. Extension of the greenback's uptrend may lead it to a resistance around the 0.70 region.

The greenback was higher against the kiwi, at nearly a 6-week high of 0.6964. At Friday's close, the pair was quoted at 0.6990. Next near term resistance for the greenback is found around the 0.68 level.