US Dollar remains down amid Powell’s comments
Wednesday 8 February, 2023
Daily Currency UpdateThe US Dollar lost ground yesterday and remains lower after a speech from the Federal Reserve Chair, Jerome Powell. Powell reaffirmed that the Fed will need to hike rates higher amid stronger jobs data. He did, however, also comment that disinflation has begun and the Fed expects to hit its target of 2% inflation at some point in 2024. This news had markets trading higher in the afternoon session and into the overnights. A rebound in oil prices is also contributing to USD weakness as data released yesterday showed a 2.18 million barrel drawdown last week, rather than an expected increase. The West Texas Intermediate Oil price is back up over $77 a barrel from $74 yesterday, bringing money out of bonds and into commodities.
Key MoversThe Euro and GBP are both holding gains made yesterday as European equities markets continue to rise. There is no significant data today, but tomorrow we will see the release of German inflation data which is expected to be at 8.9% year-over-year. Canadian markets were up yesterday and are set for a better open today. A bounce in oil prices overnight is expected to help Canada’s energy sector. This bump may continue today with this morning’s release of US oil inventories from the pipeline hub in Cushing, Oklahoma. Canadian data is quiet for the next couple of days before the release of the January jobs report on Friday. The current expectation is that the Canadian economy will record 15,000 added jobs in January.
- EUR/USD: 1.0673 - 1.0759 ▲
- GBP/USD: 1.1970 - 1.2108 ▲
- AUD/USD: 0.6889 - 0.6994 ▲
- USD/CAD: 1.3362 - 1.3467 ▼