USD slides into the weaker side of market as policymaker aren’t ready to reduce rate
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Daily Currency Update
The US Dollar Index (DXY) struggled to maintain its strength despite the Federal Reserve policymakers refraining from discussing potential rate cuts. USDCAD is currently trading near the day's low at approximately 1.3470, as the US Dollar Index (DXY) underwent a correction, dropping to around 104.00 from its 11-week high of 104.60. The reluctance of Fed policymakers to provide a timeline for interest rate reductions is rooted in their need for greater confidence in inflation returning sustainably to the 2% target. Despite the strength in the labor market and resilient consumer spending, there are concerns that these factors may not be sufficient to bring inflation back to the desired level. In the economic landscape, the constant fluctuation of prices for goods and services poses the ongoing challenge of managing inflation or deflation, where consistent price increases signify inflation and consistent decreases denote deflation.Key Movers
EURUSD remained positively positioned above 1.0750, with the USD struggling to regain demand following a recent decline. GBPUSD held modest gains above 1.2600, facing challenges in gathering bullish momentum amid cautious market sentiment. The AUD strengthened as the USD weakened due to subdued US bond yields, supported by hawkish comments from RBA's Bullock. Meanwhile, USDCAD experienced selling pressure as the US Dollar Index retreated, and Fed policymakers avoided speculating on rate cut timings. The Canadian Dollar's trajectory was poised to respond to upcoming Employment data, introducing an element of uncertainty to its performance in the market.Expected Ranges
- EUR/USD: 1.073 - 1.0784 ▲
- GBP/USD: 1.2559 - 1.2639 ▲
- AUD/USD: 0.6495 - 0.6539 ▲
- USD/CAD: 1.3457 - 1.3538 ▼