Daily Currency Update

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One year since the lockdowns

USD - United States Dollar

One year ago, with the initial onset of the COVID-19 pandemic and subsequent lockdowns, the US Dollar Index peaked at 103.5. Since March 23, 2020, it’s fallen as much as 10% off its value as equity markets recovered and commodity demand increased.

Back in March 2020, EURUSD traded as low as 1.078. GBPUSD bottomed out at 1.176. AUDUSD traded at 0.595. USDCAD, driven by USD demand, traded as high as 1.431.

Where do we stand today? The US Dollar Index, which measures the value of the dollar against a basket of currencies, was down 7.34% since last year and traded at 92.48. This morning, most pairs traded near their one-year highs against the dollar, if off the mark by just a few points. With the US with one of the higher vaccination rates, $1400 checks sent to US households and restrictions easing, the US economic engine could be chugging full steam ahead shortly.

Key Movers

Across the Atlantic, both the euro and pound had a day to forget. The euro fell 0.68% against USD and GBP fell 0.76%. Opening this morning at 1.1849 and 1.3749 respectively, it was again a story of USD strength that drove the currencies south, although a third COVID-19 wave and new lockdown measures employed by some countries certainly did not help.

The AUD has slumped 1.53% in overnight trading to open this morning at 0.7623. Bearish market sentiment drove the Aussie sell-off as doubts about the European economic recovery flustered the market. Global equity markets added fuel to the fire also, with equity indexes around the world remaining flat or in the red. This comes despite a 3.75% decline in the 10-year US bond rate, which has recently supported risk aligned currencies. Nevertheless, there have been significant flows into safe-haven currencies with the Greenback leading the way.

Expected Ranges

EUR/USD: 1.181 - 1.187 ▲

GBP/USD: 1.367 - 1.379 ▲

AUD/USD: 0.758 - 0.767 ▲

USD/CAD: 1.253 - 1.260 ▲