Dollar gives back gains following inflation

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.  

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  • FX Rates
    March 10, 2021

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  • USD
    Despite 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.
    The 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.
    The 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.
    The 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.

    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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Kathryn Garvey
Kathryn Garvey

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