Dollar gives back gains following inflation
Attention was on US inflation data this morning where the greenback started modestly higher, but gave up gains after softer than expected numbers were reported. The Bank of Canada and ECB both have meetings today where traders will look for any hints of change in monetary policy over the medium term. Equities roared back yesterday, putting pressure on yields. Today’s 10-year Treasury auction will be watched carefully with a focus on the possibility of rising yields.
March 10, 2021
EUR/USD 1.1917 GBP/USD 1.3918 USD/CAD 1.2620 AUD/USD 0.7733 USD/JPY 108.46 USD/CNH 6.5063 USD/ILS 3.3211 USD/MXN 21.0157 USD/CHF 0.9289 USD/INR 72.91 USD/BRL 5.7250 USD/SGD 1.3442 USD/DKK 6.2400 USD/SEK 8.4941 USD/NOK 8.4333
USDDespite being stronger ahead of inflation, the greenback gave up an advance after CPI for February was reported softer than expected. The House is expected to pass Biden’s $1.9T Covid relief bill this morning.GBPThe pound ticked higher rising for the first session in five yesterday and is holding above 55-DMA following US inflation data. YTD, the pound has been the top performer among the G10s ticking up 1.73% versus the dollar.EURThe euro lifted slightly following US inflation data. Any advances were within range and bullish potential limited as most players keep their eyes on US treasury yields. ECB begins its two-day policy meeting today.CADThe Canadian dollar initially slipped ahead of the Bank of Canada policy decision, but regained ground following US inflation data. Traders will listen for any changes in the medium term monetary policy during the BoC announcement.ASIA/PACIFIC
The yen struggled to take much ground back from the US dollar following soft inflation data. The safe haven yen was weighed down by overall bullishness in equity markets.
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