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US dollar slips after ECB comments

Daily Currency Update

USD - United States Dollar

Demand for the US dollar fell against its major counterparts after comments by European Central Bank President Christine Lagarde on Thursday. The US Dollar Index was down 0.53%, sitting at around 93.31 at the time of writing.

Lagarde acknowledged that inflationary pressures may last longer than originally anticipated, pointing to higher energy prices, strong demand and German VAT as factors behind the Eurozone’s inflation. But Lagarde indicated that the ECB expects these factors to ease over the next year. “We continue to see inflation in the medium term below our 2% target,” she said.

The euro rose sharply against the dollar after her comments. EURUSD was up 0.74%, trading at around 1.6886 at the time of writing

Key Movers

The pound also enjoyed gains on Thursday due to broad US dollar weakness. UK data releases are expected to be of low-impact for the currency until next week, so the pound could continue to take direction from post-Brexit headlines and pressure on the USD. GBPUSD was up 0.52%, trading around 1.3810 at the time of writing.

Demand for the Canadian dollar edged higher against the US dollar on Thursday, adding to gains from the previous day after the Bank of Canada announced the end of its emergency pandemic stimulus. USDCAD was down 0.17% trading at around 1.2339 at the time of writing.

Expected Ranges

  • EUR/USD: 1.1584 - 1.1689 ▲
  • GBP/USD: 1.3723 - 1.3812 ▲
  • AUD/USD: 0.7482 - 0.7553 ▲
  • USD/CAD: 1.2321 - 1.2379 ▼