USD holds on to gains
Tuesday 23 November, 2021
Daily Currency UpdateThe US dollar remained buoyed versus its major peers as the drop off in global risk sentiment continued to support the safe-haven currency. The US Dollar Index was trading around 96.50 at the time of writing.
The re-nomination of US Federal Chair Jerome Powell to a second term also reinforced the market’s view that the Fed is likely to begin raising interest rates after the end of its bond buying program in mid-2022. This move has kept demand for USD at around 16-month highs.
The dollar didn’t have a big reaction to data that showed US business activity moderately slowed in November due to labor and material shortages weighing on the private sector. US manufacturing activity climbed to 59.1 in November from 58.4 in October, slightly below expectations of 59.1. While services output came in lower than expected, dropping to 56.5 in November from 57.6 in October.
Key MoversFresh lockdowns in Europe have helped put pressure on the euro as investors continue to flock to safe haven assets. Additionally, it appears that all European Central Bank members are on the same page regarding European monetary direction, suggesting a change in policy may not be on the horizon. EURUSD was sitting at 1.2642 at the time of writing.
The pound also struggled on Tuesday on the back of USD strength. Brexit news also continued to weigh on the currency. The UK reportedly won't trigger Article 16 before Christmas, suggesting that they are expecting negotiations to continue in the next few weeks. Brexit uncertainty has remained an anchor for the pound for the past few years. GBPUSD was down 0.23% at around 1.3367 at the time of writing.
- EUR/USD: 1.1228 - 1.1272 ▲
- GBP/USD: 1.3347 - 1.3418 ▼
- AUD/USD: 0.7209 - 0.7244 ▼
- USD/CAD: 1.268 - 1.2744 ▲