USD rebounds ahead of inflation data
Monday 10 January, 2022
Daily Currency UpdateDemand for the US dollar rebounded on Monday as some analysts predicted that this week's CPI data release could make the case for the Federal Reserve to raise interest rates sooner than expected. Headline inflation is expected to come in at 7% year-on-year on Wednesday. Fed Funds futures contracts now expect the chances of a 25bp US interest rate hike at the January 26th meeting to be around 85% – compared to 65% at the start of this year. An interest rate hike could bring some support to the US dollar. The US Dollar Index was up 0.27% trading at around 95.98 at the time of writing.
Key MoversThe pound and the euro experienced some downward pressure against the strengthening dollar on Monday. GBPUSD was down 0.18% at around 1.3567 while EURUSD was down 0.26 at around 1.13320 at the time of writing. But there could be good news for the pound soon as the UK GDP report for November is set to be released tomorrow. It has a predicted release of 0.4% growth, which analysts take as a positive sign for the UK economy and keep expectations alive for a further rate hike in early February.
- EUR/USD: 1.1289 - 1.136 ▼
- GBP/USD: 1.3535 - 1.3598 ▼
- AUD/USD: 0.7154 - 0.7201 ▼
- USD/CAD: 1.2611 - 1.2689 ▲