US Dollar edges higher over China COVID concerns
Monday 21 November, 2022
Daily Currency UpdateThe US dollar has started the week higher against GBP & EUR. The USD has been boosted by defensive buying as investors remained on edge following a spike in COVID-19 cases in China that prompted officials to tighten restrictions.
More optimistic comments from the Federal Reserve officials have helped the safe-haven US dollar stabilise after its sharp dive earlier in November. The markets will now keep in focus the minutes from the Federal Reserves November meeting which is due to be released on Wednesday that could shed some light on how high officials may ultimately expect to raise interest rates.
On Friday, the pound rose after better-than-expected retail sales data release for the UK a day after finance minister Jeremy Hunt announced tax rises and spending cuts in an effort to reassure markets that the government was serious about fighting inflation. The pound also rose 0.5% against the euro, briefly touching its highest against the single currency in almost two weeks.
Key MoversIn Europe, three top officials said on Friday that the European Central Bank must raise interest rates high enough to dampen growth as it fights record inflation and it could soon start running down its 5 trillion euro ($5.2 trillion) debt pile.
Minutes from the ECB meeting and the Federal Reserve this week could provide markets with more direction on the outlook for interest rates, while manufacturing and consumer confidence data will give a snapshot of the health of economies.
- GBP/USD: 1.1735 - 1.1815 ▼
- GBP/EUR: 1.1505 - 1.1585 ▲
- EUR/USD: 1.0175 - 1.0255 ▼