Home Daily Commentaries USD eases from one-week highs

USD eases from one-week highs

Daily Currency Update

Demand for the US dollar eased on Wednesday though high market expectations for an interest rate hike in March seem to keep the currency well-supported. The US Dollar Index was down 0.18%, trading around 95.57 at the time of writing. US treasury yields, which roughly hit two-year highs on Tuesday, also fell slightly this morning. Federal Reserve policymakers are set to meet next week and will likely provide details on the end of quantitative easing, which will likely be in March.

Key Movers

The pound rebounded against the dollar on Wednesday after data showed UK inflation rose 5.4% in December, its highest level in 30 years, further raising rate hike expectations. GBPUSD was up 0.26%, trading at 1.3629 at the time of writing. The Canadian dollar also firmed up against the US dollar as red-hot inflation data supported a likely rate hike from the Bank of Canada next week. CAD has also been helped by high oil prices, a reflection of rising tensions in the Middle East as well as supply issues. USDCAD was sitting around 1.25030 at the time of writing.

Expected Ranges

  • EUR/USD: 1.132 - 1.1352 ▲
  • GBP/USD: 1.3576 - 1.3647 ▲
  • AUD/USD: 0.7172 - 0.7236 ▲
  • USD/CAD: 1.2456 - 1.2558 ▼