Home Daily Commentaries Revitalized USD Ending Week on Upswing

Revitalized USD Ending Week on Upswing

Daily Currency Update

The USD defied recent pressures in the overnight markets after comments from the ECB on future rate hikes failed to motivate investors. The DCY is up this morning with the US dollar up against all the other major currencies.  Data this morning that the Personal Consumption Expenditure (PCE) Index came in up 6.2% YoY and the Core number was 5.1% versus the expected 5.2%.  The PCE is the Fed’s favored inflation measure so this could have some impact on the rate decision due next Wednesday.  Still to come this morning we had the University of Michigan Consumer Sentiment survey which is expected to show more a more positive outlook on the US economy.

Key Movers

Price action across majors was largely muted on Thursday except for the euro, which plunged back below parity following the ECB latest policy update. As expected, the ECB lifted rates by 75 basis points, but the accompanying statement suggest policy makers may adopt a more cautious and measured approach to future interest rate adjustments. The statement affirmed a growing expectation major central banks have now passed the point of “peak hawkishness”. The shift in narrative has prompted a sharp correction in global bond rates, with European bond’s leading the decline overnight. In other news, softening, there is an elevated level of uncertainty as investors remain conscious a recession in 2023 is still highly likely. Our attentions turn now to the Bank of Japan policy meeting, US labor market data, German GDP and German inflation updates as key markers leading into the weekly close.

Expected Ranges

  • EUR/USD: 0.9934 - 1.0043 ▼
  • GBP/USD: 1.1513 - 1.1630 ▼
  • AUD/USD: 0.6264 - 0.6514 ▼
  • USD/CAD: 1.3515 - 1.3777 ▲