Home Daily Commentaries USD furthering gains as market rallies stall

USD furthering gains as market rallies stall

Daily Currency Update

The USD is seeing gains this morning as further rate hikes from the FOMC come back into focus.  The market has priced in 1.5% in hikes over the next 2 Fed announcements.  Comments last night though from FOMC member Harker has the market seeing further hikes in early 2023.  Futures are down this morning, but the Dow so far has stayed above the 30K barrier.  There is no significant data in the US today, so markets remain focused on inflation concerns.  The focus points next week will be the advanced GDP numbers on Tuesday and CPE inflation data on Wednesday.

Key Movers

The Euro has lost ground this morning as the EURUSD cross ailed to cross the 200-day moving average.  Traders looking ahead to next week’s ECB announcement still have a 75-point hike priced in but some concern has come in to play on future hikes after ECB policymakers pointed to a recession in the new year.

The GBP is under pressure this morning against most majors after the shock resignation yesterday by Prime Minister Liz Truss.  The uncertainty caused by this has weighed on the Pound.  The Conservative party has announced a shorter leadership selection process to calm things, but it has had little effect.

The USDJPY pair is testing the 150 mark again after Japanese inflation data came in at 3% and the BoJ reiterated their stance that lower rates are their preference currently.

The Canadian is holding on to yesterday’s range in pre-market trading.  Retail sales for August came in stronger than expected at 0.7% but the advanced numbers for September came in down 0.5%.   Oil is bouncing off lows with Western Canadian Select up almost $1 a barrel today.

Expected Ranges

  • EUR/USD: 0.9707 - 0.9842 ▼
  • GBP/USD: 1.068 - 1.1323 ▼
  • AUD/USD: 0.6213 - 0.6355 ▼
  • USD/CAD: 1.3655 - 1.3852 ▲