Daily Currency Update

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The Greenback continues to strengthen, helped by fewer bets on deep US rate cuts

USD - United States Dollar

The US dollar index increased 0.12 percent this morning, following fewer bets on deep US rate cuts of the US dollar. At the same time, the North American equity market and gold are falling. Market participants will focus on Federal Reserve Chairman Jerome Powell's two-day testimony to Congress this week to look for any possible hints of a rate decrease. The Fed is in a difficult situation at the moment because the data doesn't really mandate policy easing, but market participants are pricing in a decent chance of adverse economic outcomes, and so the FOMC seems forced to deliver a rate cut.

Key Movers

The GBP/USD pair is falling and has broken the psychological level of 1.2500. It is trading at 1.2469 at the time of this writing. Sterling hovered near a six-month low against the US dollar as market participants continued to bet on lower British interest rates and added to their short positions on the currency. The doubt over Britain's departure from the European Union, as well as over who will become the new British Prime Minister and lead the country out of the bloc, added to the British Pound's weakness.

The USD/CAD pair increases 0.2 percent (weaker Loonie) following fewer bets on deep US rate cuts for the US dollar. Technically speaking, the USD/CAD pair might have an important resistance at 1.3140 and it also has crucial support at around the 1.3100 handle.

Expected Ranges

USD/CAD: 1.3100 - 1.3168 ▲

EUR/USD: 1.1195 - 1.1243 ▼

GBP/USD: 1.2401 - 1.2507 ▼

AUD/USD: 0.6900 - 0.6941 ▼

NZD/USD: 0.6560 - 0.6645 ▼