Dollar extends rally as Federal Reserve in focus
Daily Currency Update
The US dollar extended its rally against major rivals on Monday as market participants waited for the Federal Reserve's interest rate decision this week. High inflation fueled analyst expectations for a more aggressive than anticipated move from US Federal Reserve policymakers, which could further boost demand for the US dollar.
Demand for the safe-haven US dollar jumped last Friday after US CPI data showed that inflation had jumped back up once more to 8.6% after it was expected to come in at 8.3%.
The US Dollar Index was sitting at 104.85 at the time of writing.
The pound suffered some losses last week against many of its major rivals. This weakness continued into this week as GBPUSD fell to its lowest level in about a month after falling below the 1.2250 mark in early London trading.
The trigger for sterling weakness this morning was the release of GDP month-on-month data that showed that the UK economy has contracted by roughly 0.3% versus an expected 0.2% contraction. GBPUSD was trading around 1.2149 at the time of writing.
- EUR/USD: 1.0431 - 1.0518 ▼
- GBP/USD: 1.2149 - 1.2322 ▼
- AUD/USD: 0.6943 - 0.7042 ▼
- USD/CAD: 1.2777 - 1.2876 ▲