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US dollar edges lower

Wednesday 8 December, 2021

Daily Currency Update

The US dollar edged lower against a basket of currencies on Wednesday while demand for other commodity-based currencies like the Australian dollar jumped. The US Dollar Index was down 0.35% at around 96.03 at the time of writing. AUDUSD gained for another session this morning after yesterday’s rally. The AUD and CAD topped the leaderboard on Tuesday as the JPY, EUR, GBP and CHF all moved lower. Some analysts attributed the slight move away from the safe-haven USD to waning concern over the potential effects of the Omicron variant. However, those reports are largely unverified and experts are still waiting for concrete data.

Key Movers

EURUSD bounced back above the 1.13 handle as investors’ risk appetite improved slightly. With little macroeconomic figures to digest, COVID-19 developments seem to be the key market driver for now. GBPUSD was little changed on Wednesday as investors lacked substantial economic data to chew on. COVID-19 cases in the UK are drifting higher, however the vaccination campaign seems to be keeping hospitalizations and deaths at a much lower level compared to the start of the year. As mentioned, the protection offered by the current range of vaccines to Omicron will likely be crucial to sterling’s performance over winter, as will likely be the Bank of England’s interest rate decision next week. GBPUSD was sitting around 1.3230 at the time of writing. Demand for the Canadian dollar steadied this morning after the Bank of Canada held its benchmark interest rate at 0.25%, as expected. The central bank maintained its view that a hike could come in April 2022. USDCAD was trading around 1.2657 at the time of writing.

Expected Ranges

  • EUR/USD: 1.1242 - 1.1334 ▲
  • GBP/USD: 1.3175 - 1.3261 ▼
  • AUD/USD: 0.7107 - 0.7177 ▲
  • USD/CAD: 1.2611 - 1.2668 ▲