Daily Currency Update

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The U.S. dollar falls, despite inflation increasing more than expected in November.

USD - United States Dollar

Later today, at 2 pm EST, the Fed is likely to keep its benchmark interest rates at the 1.75 percent level after its two-day meeting. The Fed is also expected to keep a wait-and-see posture on more rate reductions, but market participants will eagerly be waiting for the FOMC to update its rate forecast through 2022. Chairman Jerome Powell will give a press conference at 2:30 pm EST.

The consumer price index in the U.S. rose 0.3 percent in November on a seasonally adjusted basis, after rising 0.4 percent in October. This is 0.2 percent higher than expected. Increases in the shelter.

White House economic adviser Larry Kudlow pushed back on the news that China expects the U.S. is delaying a threatened tariff increase set for Sunday. Kudlow said that no decision had been reached yet. It seems like China, and the U.S. are de-escalating tensions by cutting import taxes currently in place.

The U.S.-Mexico-Canada trade deal gained backing from House Democrats, so it will be put to the vote next week after House Democrats secure critical revisions on the environment, pharmaceuticals, labor, and overall enforcement. In Mexico City, the revised USMCA was signed by representatives from the three countries.

Key Movers

An essential poll released yesterday showed that while Prime Minister Boris Johnson remains on track for an overall majority; however, his lead is declining. YouGov MRP poll showed a narrowing of an anticipated win for conservatives from the first prediction two weeks ago. The GBP/USD and GBP/CAD are rising 0.12 and 0.13 percent towards 1.3171 and 1.7428, respectively, at the time of this writing. According to Bloomberg, anti-Brexit campaigners are putting their efforts into a tactical vote campaign in the hopes of stopping Johnson’s Conservative Party from gaining a majority.

There is a lot of uncertainty and expectations on the European Central Bank, more specifically on its new President Christine Lagarde, who will lead her first policy decision tomorrow, the same day of the U.K elections. Uncertainty remains over Lagarde’s first meeting with no clear expectation about the future direction of rates.

Expected Ranges

USD/CAD: 1.3191 - 1.3265 ▼

EUR/USD: 1.0989 - 1.1157 ▲

GBP/USD: 1.3081 - 1.3240 ▲

AUD/USD: 0.6805 - 0.6865 ▲

NZD/USD: 0.6483 - 0.6590 ▲