US dollar dips from two-month high
Tuesday 22 June, 2021
Daily Currency UpdateUSD - United States DollarThe US dollar fell slightly against major currencies, but still held on to some of its gains following last week’s US Federal Reserve meeting. The US Dollar Index was down 0.34% at 91.92 at the time of writing. Last week, the US dollar experienced its best performing week of 2021 on the back of the US central bank’s meeting and statement. Fed Chair Jerome Powell signalled two rate hikes for 2023 and upgraded inflation and growth forecasts.
Key MoversURUSD was trading at the 1.91 mark ahead of European Central Bank President Christine Lagarde’s speech. If the European Central Bank acknowledges rising inflation and a need to change stance, it could lead the euro to trade in a similar pattern as the US dollar last week.Sterling climbed back up against the dollar after GBPUSD fell to its lowest level since April following the Fed’s statement last week. GBPUSD climbed 0.66% to 1.3894 at the time of writing. The Bank of England’s message did not carry the same tone as the US central bank, as Governor Bailey reiterated that they would maintain the current course of monetary policy until they saw clear evidence of improvement in the UK economy. In COVID-19 related news, the UK continues to see a rising infection rate due to the Delta variant. The pound could remain muted until there’s an announcement to end restrictions or the infection rate dips dramatically.The Bank of Japan made no surprises on Friday, retaining its ultra-loose monetary policy intact and maintained its short-term interest rates at -0.1%. The pandemic-relief programme was extended a further six months past September to March 2022. USDJPY was up 0.8% at 110.233 at the time of writing. The Australian dollar was in freefall on Friday, closing below 75 US cents and key support lines for the first time in 2021. A stronger than expected domestic unemployment print during the week did little to support the Australian dollar as money poured into USD to close the week. AUDUSD was trading at 0.75243 at the time of writing.
- EUR/USD: 1.1852 - 1.192 ▲
- GBP/USD: 1.3789 - 1.3917 ▲
- AUD/USD: 0.7482 - 0.7536 ▲
- USD/CAD: 1.2379 - 1.2482 ▼