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Graphic: World FX rates Link

By Karen Brettell

NEW YORK, Nov 28 (Reuters) - The dollar clawed back from earlier losses on Monday as a hawkish Federal Reserve official laid out the case for further rate hikes, while the Australian dollar sank on concerns about unrest over COVID restrictions in China.

The greenback rebounded in early U.S. trading and added to gains after St. Louis Fed President James Bullard said that the U.S. central bank needs to raise interest rates quite a bit further and then hold them there throughout next year and into 2024 to gain control of inflation and bring it back down toward the Fed's 2% goal.

Comments from Fed Chair Jerome Powell on Wednesday will be watched for any new signals on further tightening with key U.S. jobs data for November also due on Friday. The U.S. central bank is expected to hike rates by an additional 50 basis points when it meets on Dec. 13-14. FEDWATCH

“The markets have hit a bit of a plateau about what they’re expecting. They know that the Fed’s going to raise rates, and that’s behind everything, but they’re not sure how much or when,” said Joseph Trevisani, senior analyst at FXStreet.com.

The dollar index =USD has fallen to 106.65 from a 20-year high of 114.78 on Sept. 28 on expectations that its rally may have been overstretched and as the Fed looks to slow its pace of rate increases.

Some of the recent decline is also likely due to investors and traders booking profits before year-end, said Trevisani, noting that many trading firms curtail activity in December.

The dollar had dipped earlier on Monday despite other safe haven currencies the Japanese yen and the Swiss franc gaining on concerns about China.

Hundreds of demonstrators and police clashed in Shanghai on Sunday night as protests over China's stringent COVID restrictions flared for a third day and spread to several cities in the wake of a deadly fire in the country's far west.

Shaun Osborne, chief FX strategist at Scotiabank in Toronto, said that the earlier decline in the dollar despite worsening risk appetite could reflect a shift in market sentiment towards the U.S. currency, but noted that it’s too soon to be certain.

The greenback was last down 0.22% to 138.87 Japanese yen JPY=EBS . The euro EUR=EBS dipped 0.60% to $1.0339.

The risk sensitive Aussie dollar AUD=D3 , which is strongly tied to Chinese growth, was the worst performing major currency, falling 1.61% to $0.6648. The currency was also dented by data showing that Australian retail sales suffered their first fall of 2022 in October as rising prices and higher interest rates finally seemed to have an impact on spending.

The offshore yuan CNH= weakened against the dollar to 7.2467.

Bitcoin fell after major cryptocurrency lender BlockFi filed for Chapter 11 bankruptcy protection along with eight affiliates, the latest crypto casualty to follow the spectacular collapse of the FTX exchange earlier this month.

The cryptocurrency BTC=BTSP was last down 1.30% at $16,211.

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Currency bid prices at 3:01PM (2001 GMT) Description

RIC

Last

U.S. Close Pct Change

YTD Pct

High Bid

Low Bid

Previous

Change

Session

Dollar index

=USD

106.6500

106.3400

+0.30%

11.485%

+106.6900 +105.3100 Euro/Dollar

EUR=EBS

$1.0339

$1.0403

-0.60%

-9.05%

+$1.0497

+$1.0337 Dollar/Yen

JPY=EBS

138.8650

139.1650

-0.22%

+20.62%

+139.4350 +137.5000 Euro/Yen

EURJPY=

143.59

144.75

-0.80%

+10.18%

+145.0000 +143.0600 Dollar/Swiss

CHF=EBS

0.9491

0.9480

+0.16%

+4.10%

+0.9495

+0.9407 Sterling/Dollar GBP=D3

$1.1953

$1.2089

-1.10%

-11.60%

+$1.2118

+$1.1952 Dollar/Canadian CAD=D3

1.3491

1.3400

+0.69%

+6.71%

+1.3493

+1.3395 Aussie/Dollar

AUD=D3

$0.6648

$0.6756

-1.61%

-8.56%

+$0.6728

+$0.6646 Euro/Swiss

EURCHF=

0.9812

0.9833

-0.21%

-5.37%

+0.9890

+0.9793 Euro/Sterling

EURGBP=

0.8649

0.8598

+0.59%

+2.96%

+0.8675

+0.8587 NZ

NZD=D3

$0.6162

$0.6247

-1.38%

-9.99%

+$0.6244

+$0.6160 Dollar/Dollar

Dollar/Norway

NOK=D3

10.0270

9.8765

+1.36%

+13.64%

+10.0270

+9.8835 Euro/Norway

EURNOK=

10.3634

10.2549

+1.06%

+3.50%

+10.3856

+10.2623 Dollar/Sweden

SEK=

10.5531

10.4112

+0.84%

+17.02%

+10.5571

+10.3700 Euro/Sweden

EURSEK=

10.9075

10.8171

+0.84%

+6.58%

+10.9160

+10.8406
Editing by Nick Zieminski and Chizu Nomiyama