USD remains firm amid Fed member commentary
Daily Currency Update
The US Dollar Index sat near the 105.958 level this morning, rising by around 0.32% in the past 24 hours. The US dollar regained strength amid commentary from several Federal Reserve rate-setters that suggested that the Fed is reluctant to cut interest rates due to insufficient progress toward lowering inflation. Raphael Bostic, President of the Atlanta Federal Reserve noted that US interest rates will have to be kept at a “restrictive level” and might only ease towards the end of 2024. This commentary from Fed members helped strengthen the USD so far today. This is because keeping the Fed rate high leads to greater foreign capital inflows from investors seeking returns.Key Movers
In the Eurozone, the EUR/USD pair continued to trade sideways within a 1.0660-1.0760 range, unable to decide its direction ahead of the first round of France’s snap election on June 30.In UK news, the GBP/USD pair remained tight in a narrow range for the second straight day today. The markets, however, still priced in a greater chance that the US central bank will start cutting interest rates in September, which kept the bullish USD on the defensive and acted as a tailwind for the GBP/USD pair. That said, the Bank of England's (BoE) pause last week capped the upside for the British Pound (GBP) and the currency pair ahead of the UK general election on July 4.
The USD/JPY pair consolidated near a two-month high but remained below the 160 mark amid the risk of market intervention from Japanese authorities or the Bank of Japan (BoJ) to prop up the domestic currency.
The CAD remained mostly unchanged so far today, after edging through the upper 1.36 level in overnight trading. A second consecutive weekly gain was on the table for the Loonie for the first time since mid-April. In oil news, West Texas Intermediate (WTI) crude oil was at the 80.40 level this morning, dipping by around -0.21%.
Expected Ranges
- EUR/USD: 1.06660 - 1.07180 ▼
- GBP/USD: 1.2618 - 1.2694 ▼
- AUD/USD: 0.66360 - 0.66890 ▲
- USD/CAD: 1.36507 - 1.37038 ▲