FX round-up: US dollar hits 14-year high

The Greenback hit a 14-year high on Wednesday as markets continued to price-in the prospect of higher inflation and interest rates.

"Global growth and profit expectations rise to one-year highs; inflation expectations soar to 12-year highs; number of investors expecting yield curve steepening surges by record amount…US election result seen as unambiguously positive for nominal GDP," strategists at Bank of America-Merrill Lynch said in a summary of their monthly global fund manager survey.

"Trade in "bond proxies" soon but our cyclical view of peak liquidity, globalization, inequality = "yield" dam has been broken," they said.

Acting as a backdrop, as of 1853 GMT the US dollar spot index was 0.25% higher at 100.48, having hit a 14-year high earlier on at 100.57.

Cable was also lower, albeit only slightly, dipping 0.22% to 1.2432 following the release of weaker-than-expected official employment data for September and October.

To take note of, speaking in the afternoon Monetary Policy Committee member Sir Jon Cunliffe said the pound's depreciation made it harder to keep interest rates low.

Dollar/yen was little changed at 109.35, up by just 0.16% on the day, although euro/dollar appeared intent on pushing lower, falling by 0.56% to 106.69.

However, the odds of a December rate hike by the US Fed were unchanged at 90.6%, according to the CME's Fed Watch tool.

That came as two top US central bank official offered disparate views on the likelihood of a tightening move next month.

For St.Louis Fed president James Bullard only a surprise would keep the Federal Open Market Committee from making a move.

Be that as it may, his opposite number at the Minneapolis Fed, Neel Kashkari, said he wanted to see more progress on inflation, inflation expectations and unemployment before backing a rate hike.

The Aussie was lower on all its crosses, with support for the currency knocked out from underneath it as metals prices fell back following their recent bull run higher.