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USD picks up again after PPI data

Tuesday 14 December, 2021

Daily Currency Update

Demand for the US dollar picked up again during midday trading in New York and Toronto after dipping earlier in the morning. Data showed that US producer prices climbed 0.8% in November, with factory gate inflation at 11-year highs. This seemed to reassure the market that the US Federal Reserve will announce on Wednesday an end to their bond-buying program earlier than anticipated. With the USD expected to be stronger for longer, some analysts think this week’s policy updates will go a long way in shaping near term USDJPY, GBP and EUR direction. With the Fed expected to begin hiking rates in mid-2022, a dovish surprise or failure to meet market expectations could prompt a short-term correction in recent USD upside. The US Dollar Index was up 0.15% trading at 96.46 at the time of writing.

Key Movers

As a wave of new COVID-19 infections sweep Europe and the US, some analysts think concerns over Omicron variant will again derail the global economic recovery and consume market commentary. With plenty of risk events crowding the macroeconomic calendar, this week’s investors appeared content in correcting positions. The euro firmed against the dollar this morning sitting at around 1.1274, while the pound held on to small gains, with GBPUSD sitting around 1.3233 at the time of writing. The Canadian dollar continued to struggle, with USDCAD advancing for a fifth straight day, trading at 1.2847.

Expected Ranges

  • EUR/USD: 1.1269 - 1.1321 ▼
  • GBP/USD: 1.3192 - 1.3254 ▲
  • AUD/USD: 0.7093 - 0.7138 ▼
  • USD/CAD: 1.2784 - 1.2852 ▲
  • USD/MXN: 20.929 - 21.1872 ▲