USD demand down ahead of Fed meeting
Monday 26 July, 2021
Daily Currency UpdateCAD - Canadian DollarDemand for the The US dollar edged lower against other major currencies, including the Canadian dollar, as investors waited for the US Federal Reserve’s meeting this Wednesday. USDCAD was down 0.26% to 1.2529 at the time of writing. The Fed meeting is set to be the focus of investors this week as it grapples above trend growth and inflation. While the central bank isn’t expected to provide a detailed timeline of when it could taper its ultra-loose monetary policy, any rhetoric around the issue will underline the US dollar.
Key MoversThe Japanese yen recorded the largest decline among the majors on Friday, falling 0.34% against the US dollar to open at 110.51. Widely considered to be a 'barometer of fear' the increase in the USDJPY signals a positive turn in risk sentiment on Friday which was also reflected on Wall Street. Adding to the yen’s woes are reports of increasing infections in Japan. While reports of athletes and organizers testing positive to COVID-19 have not stopped the Olympics from moving forward, cases are edging higher and there are concerns that the Olympics will prove to be a super-spreader event. Ultimately, global risk sentiment shrugged off these concerns somewhat on Friday with the yen reversing course and falling against USD. Nevertheless, the pair remains under pressure in relation to COVID-19 headlines. USDJPY was down 0.31% this morning, trading around 110.170.For the euro, some analysts think the single currency seems to be acting as the last bastion of defence against the US dollar which has left no major currency untouched in its recent performance. However EURUSD came off its recent highs to trade around 1.8090 at the time of writing.It is set to be a quiet week ahead for the UK on the data front with little to report. Last week did see the release of retail sales figures which beat market expectations, with some analysts attributing the surge to consumer spending at the Euro Cup. This week, any further upside gains for the pound could be limited by the ongoing dispute over the Northern Ireland protocol.
- EUR/CAD: 1.4787 - 1.4833 ▲
- GBP/CAD: 1.7274 - 1.7355 ▲
- AUD/CAD: 0.9229 - 0.9262 ▲
- USD/CAD: 1.2531 - 1.2588 ▼