Daily Currency Update
USD - United States DollarFederal Reserve Chairman Jerome Powell will spend the next two days testifying before members of Congress and his comments will be closely watched.Yesterday, the US dollar slipped against its major peers after the Federal Reserve announced the start of its corporate bond buying program. The plan is intended to act as a stimulus package, and leaders hope it will alleviate the burden many SMEs are facing as a result of the global pandemic.Powell regularly provides Congressional testimony to discuss the Federal Reserve’s monetary policy. Also yesterday, President Donald Trump announced a plan to spend $1 trillion on infrastructure projects. The dollar came under heavy selling pressure after the two announcements. Traders jumped back in to risk and growth correlated currencies. The US dollar was the weakest of the majors with the dollar index falling half a percent, while the JPY and CHF also shifted lower.
Key Movers
With little of note on the macroeconomic docket today attentions will remain with the broader risk tone. The Bank of Japan’s monthly policy meeting will likely pass without incident while US retail sales are unlikely to tip the scales. The market continues to largely ignore backward looking fundamentals instead looking to sentiment and forward guidance as markers of future performance and signals guiding the speed of any economic recovery. That said a strong retail sales print could bolster risk appetite as consumer spending increases amid easing restrictions.
Expected Ranges
- USD/CAD: 1.351 - 1.357 ▲
- EUR/USD: 1.122 - 1.134 ▼
- GBP/USD: 1.255 - 1.268 ▼
- USD/AUD: 1.434 - 1.462 ▲