Daily Currency Update

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The Greenback keeps rising against G10 currencies, with Trump's speeches fueling its increase even further.

USD - United States Dollar

The Greenback is increasing against the Euro, the Pound, and the Aussie dollar by 0.02, 0.15 and 0.11 percent respectively. However, it is paring gains ahead of several Federal Reserve speakers and the release of the January Federal Open Market Committee meeting minutes later today at 2:00 pm EST. The January producer price index demand came in at 0.5 percent versus the 0.1 percent expected. However, right after this release, the U.S. dollar was little changed. The USD/JPY pair edged to fresh trend highs of over 110.65, while the EUR/USD pair dipped under 1.0800. Furthermore, the Greenback has been increasing along with other commodity currencies in overnight trading amid signs that China is planning further stimulus measures to shield its economy from the coronavirus outbreak.

Yesterday, President Trump, in a rare move, intervened to stop his own administration's developing plans to block sales of General Electric-made jet engines to China and other proposed restrictions on American exports. Trump said that national security is being used too often by his officials to limit American companies' ability to transact with China. Surely this gave a boost to a better environment in the FX capital markets, where the Yen is the biggest loser and the U.S. dollar is still the king. Trump also added, "I've been very tough on Huawei. But that doesn't mean we have to be tough on everybody that does something. We want to be able to sell all of this incredible technology - we're number one in the world."

Key Movers

According to Statistics Canada, the Canadian CPI came in at 2.4 percent y/y in January, while 2.3 percent was anticipated. The most significant upside contributor to monthly inflation was the food category. The most important upside contributor to yearly inflation was the transportation category. The USD/CAD pair touched and then bounced slightly from the 200 moving average at 1.3218 this morning. The Loonie is soaring around 0.3 percent versus the U.S. dollar

According to the Office for National Statistics in the U.K., inflation in January rose to a six-month high as energy and house prices rose. The CPI came in at 1.8 last month, up from 1.3 percent in December. According to Ruth Gregory, Senior U.K. Economist at Capital Economics, "...the fact that inflation is in line with its projections provides another reason not to cut interest rates in the near-term." The rate currently stands at 0.75 percent. The BoE's next meeting is due on March 26th. He said: "Rishi Sunak is likely to use the Budget to announce a welcome boost to longer-term investment, but stand for the fiscal rules for short-term spending until the fog has cleared."

Chancellor of the Exchequer Rishi Sunak confirmed that he would disclose the Johnson government's budget on March 11th, and cancelled a trip to meet G-20 finance ministers in Riyadh on Feb. 22-23rd. The potentially radical budget could see Sunak rip up spending rules and put a more substantial tax burden on wealthy people.

Expected Ranges

USD/CAD: 1.3215 - 1.3243 ▼

EUR/USD: 1.0785 - 1.0835 ▲

GBP/USD: 1.2948 - 1.2984 ▼

AUD/USD: 0.6660 - 0.6697 ▼

NZD/USD: 0.6375 - 0.6414 ▼