Daily Currency Update

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The Greenback advances due to the U.S. - Iran geopolitical mess.

USD - United States Dollar

The Greenback increases 0.31 percent against a basket of 6 currencies (Euro, Pound, Yen, Loonie, Swedish Krona, and Swiss Franc) this morning, primarily due to geopolitics. Iran announced that it was assessing 13 scenarios for retaliation against the U.S. Ali Shamkhani, the head of Iran's national security council, said: "Even if the weakest of these scenarios gain a consensus, its implementation can be a historic nightmare for the Americans." Iranian officials have previously said that U.S. forces in the region will be targets, and the Iranian parliament on Tuesday designated the Pentagon and affiliated companies as terrorists. According to Bloomberg, the U.S. issued a warning to the shipping industry in the Middle East over the possibility of Iranian action against U.S. maritime interests.

On the economic data side, the U.S. November trade balance, December ISM non-manufacturing and November factory orders will be released today.

Key Movers

In the Eurozone, inflation increased in line with expectations at 1.3 percent for December, up from 1 percent. This has been attributed to the increase in energy prices, which rose by 0.2 percent. However, inflation remains below the ECB's target, and that's probably why the EUR/USD pair cannot break above the 1.1200 psychological level.

The Aussie dollar was the main loser in overnight trading; it fell over 1 percent against the U.S. dollar, mainly due to the bushfire crisis. It is trading at 0.6866 at the time of this writing. Furthermore, the latest ANZ job advertisements data reported the most significant job drop of -6.7 percent since May 2019; this data is raising downside risks following the Australian jobs report on January 23rd.

Expected Ranges

USD/CAD: 1.3000 - 1.3039 ▲

EUR/USD: 1.1139 - 1.1160 ▼

GBP/USD: 1.3095 - 1.3139 ▼

AUD/USD: 0.6839 - 0.6880 ▼

NZD/USD: 0.6602 - 0.6635 ▼