Daily Currency Update

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USD steady at 5-month lows as NZD gains

USD - United States Dollar

The US dollar was steady near five-month lows ahead of tomorrow’s quarterly GDP numbers. The US Dollar Index was trading at 89.89 at the time of writing.

The New Zealand dollar was the big winner among the majors in early trading after the Reserve Bank of New Zealand hinted at raising interest rates by September 2022. Demand for the NZD reached a three-month high against the USD. NZDUSD was up 0.94%, trading at 0.7292 this morning.

Stocks edged up to record highs yesterday and continued to rally today as some investors' inflation fears started to subside. The US Federal Reserve continued to insist that the recent spike in prices is temporary.

Key Movers

EURUSD was down slightly 0.2% to 1.2221, but still close to its highest since January. Yesterday, the European Central Bank (ECB) Governing Council member François Villeroy stated that the ECB would be happy to let inflation run above the 2% mark for some time. The comments didn’t have any significant impact on the Euro, however these comments give us a good understanding of the ECB’s stance on inflation.

GBPUSD dipped back to the 1.41 handle yesterday and was down 0.8% this morning, trading at 1.413. Dominic Cummings, UK Prime Minister Boris Johnson’s former top advisor, is set to give evidence on the UK government’s handling of the COVID-19 crisis to a committee of members of Parliament. If there is heavy criticism of how things were dealt with, we could see a selloff in sterling.

Expected Ranges

EUR/USD: 1.221 - 1.226 ▼

GBP/USD: 1.412 - 1.417 ▼

NZD/USD: 0.721 - 0.731 ▲

USD/CAD: 1.204 - 1.211 ▲