USD nearing 1 month high , all eyes on Fed’s Powell
Tuesday 7 February, 2023
Daily Currency UpdateUSD soared near 1-month highs during the early trading hours today. This comes ahead of a speech by Federal Reserve Chair, Jerome Powell. Markets are fishing for any indications on height of U.S. interest rates this year. USD index erased the session losses of up to 0.2% and edged up 0.1% to 103.68 levels, holding around its highest since early January 2023. Tensions between the US and China are a source of concern and likely weighing on the global economic sentiment. As tensions rise, the eurozone cannot count on a supportive data flow to keep the growth re-rating process going.
Key MoversThe euro fell 0.2% against USD to the 1.07025 level in the earlier trading session of the day, having hit its lowest mark since January 9th. This was followed by European Central Bank’s (ECB) Governing Council member, Joachim Nagel, making some hawkish comments that rate cuts are not on the agenda in the foreseeable future and noted that the ECB rates are not yet restrictive. The pound is down 0.3% against the USD hitting the 1.1982 levels, after tumbling to a one-month low of 1.1974 in the previous session. Markets are weighing on further commentary from central bankers this week following a dovish outcome of the Bank of England’s (BoE) meeting held last week. We continue to expect the BoE to deliver a final rate hike of 25 basis points in March. Oil recovered dramatically from its drop near $72.60, to the $75.00 mark. This increase spurs on growing hopes of an economic recovery in China after dismantling the pandemic controls.
- EUR/USD: 1.0682 - 1.0744 ▼
- GBP/USD: 1.1968 - 1.2056 ▼
- AUD/USD: 0.6861 - 0.6946 ▲
- USD/CAD: 1.3406 - 1.3468 ▲