Daily Currency Update

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The U.S. dollar rises along with higher than expected inflation.

USD - United States Dollar

The Consumer Price Index for All Urban Consumers (CPI) rose 0.4 percent in October on a seasonally adjusted basis after being unchanged in September, the U.S. Bureau of Labor Statistics reported few minutes ago.

Fed chair Jerome Powell will attest to the U.S. economic outlook before the Joint Economic Committee. It is the first time he's ever appeared before that committee. This event might not bring much to the market participants. His assessment of the Fed's policy stance and the state of the economy probably won't change much since his Oct. 30th press conference. Still, market participants' expectations have probably changed, with the easing cycle seen as done and dusted in the near term.

Donald Trump renewed his assault on the Federal Reserve during his speech to the Economic Club of New York yesterday by saying that the U.S. was at a "competitive disadvantage" because the Fed had not followed the Eurozone into the land of negative rates. He also added that a, “significant phase one deal with China," remained "close" and "could happen soon," as Beijing was "dying to make a deal." He ended by saying that U.S. tariffs on Chinese goods would be "raised very substantially" if no truce was reached with officials in Beijing.

Key Movers

New Zealand unexpectedly held interest rates at 1 percent, in a move against expectations, and identified signs the domestic economy will stop slowing and that inflation will pick up. The NZD/USD and NZD/CAD pairs jumped over 1 percent, and, at this moment, both are trading at 0.6402 and 0.8485, representing a 1.3 and 1.12 percent increase, respectively. Does this surprising move show evidence of a global policy shift after the Fed signaled a pause in late October and after the RBA held the rate steady last week?

Expected Ranges

USD/CAD: 1.3236 - 1.3265 ▼

EUR/USD: 1.0970 - 1.1032 ▲

GBP/USD: 1.2760 - 1.2842 ▼

AUD/USD: 0.6809 - 0.6833 ▼

NZD/USD: 0.6372 - 0.6436 ▲