USD demand up after Powell nomination
Monday 22 November, 2021
Daily Currency Update
CAD - Canadian DollarDemand for the US dollar jumped on Monday morning following news of President Biden nominating US Federal Chair Jerome Powell to a second term, putting pressure on the Canadian dollar as a result. USDCAD was up 0.27% at around 1.26727 at the time of writing. Some analysts point to the nomination as a signal that rates could lift sooner than anticipated. The USD seems to be gathering strength on the back of this hawkish view by the market.
Key MoversThe euro struggled against the strengthening USD on Monday as the number of COVID-19 cases in Europe continues to worry authorities. Austria is the latest to go into another full lockdown, with Germany looking to follow suit. The euro has also been pressured by central banks’ diverging monetary policy. Both the Fed and Bank of England have plans to raise interest rates significantly by the end of 2022, while the European Central Bank has consistently poured cold water on the idea, suggesting that inflation is transitory and will likely be resolved, without having to be artificially manipulated. EURUSD was down 0.30% trading around 1.2459 at the time of writing. GBPUSD has slipped from highs of $1.37 to just above $1.34 in the span of three weeks, mostly due to US dollar strength. It has strengthened amid global uncertainty in part caused by COVID-19 and supply chain issues. Investors tend to move to the safe haven US dollar during times of uncertainty. The unexpected decision from the Bank of England to keep interest rates the same also caused some pound weakness. Having said that, the Bank of England could raise interest rates in December’s meeting in a bid to tackle rising inflation, which will likely be positive for the pound. GBPUSD was sitting around 1.3411 at the time of writing.
- EUR/CAD: 1.4239 - 1.4282 ▼
- GBP/CAD: 1.6964 - 1.7013 ▲
- AUD/CAD: 0.9143 - 0.9192 ▲
- USD/CAD: 1.2631 - 1.268 ▲