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USD benefits from safe haven flows

Daily Currency Update

The US dollar saw some broad strength on Wednesday, while the euro weakened as investors weighed the more hawkish stance from Federal Reserve policymakers and waited for US President Biden to unveil new sanctions against Russia. Biden headed to Europe for emergency talks with European leaders about the Russia-Ukraine crisis. The US Dollar Index was up 0.23% at 98.72 at the time of writing.

There were several key European Central Bank speakers in the spotlight yesterday and none were able to generate any momentum or headlines that moved the euro. This likely suggests that the ECB will not be making any significant moves in regards to tightening of monetary policy, further increasing the divergence between the ECB and the Federal Reserve. The gap between the two central banks is likely to stunt the recovery of the euro for the time being. EURUSD was down 0.30, sitting at around 1.0996 at the time of writing.

Key Movers

The pound pulled back versus the dollar on Wednesday, pressured by a shift to negative sentiment as investors awaited new sanctions against Russia. Latest UK inflation figures showed that the cost of living rose by 6.2% in the last 12 months to February vs an expected 6.0%. This is the fastest that prices have climbed in over 30 years, with food, energy and fuel significantly increasing. GBPUSD was down 0.41% trading at 1.3205 at the time of writing. The Canadian dollar strengthened slightly against the US dollar slightly as oil prices as oil and natural gas prices jumped again. USDCAD was down 0.13% at 1.2554 at the time of writing.

Expected Ranges

  • EUR/USD: 1.0965 - 1.1037 ▼
  • GBP/USD: 1.3177 - 1.3291 ▼
  • AUD/USD: 0.7431 - 0.7495 ▲
  • USD/CAD: 1.2544 - 1.261 ▼