USD is in demand this morning as risk sentiment erodes. Tensions between Russia and Ukraine have global powers on edge. Pres. Biden is considering deploying troops to NATO allies in eastern Europe and the Baltics. Fear of impending rate hikes this year weigh further on equity markets as the Nasdaq continues to decline. Volatility will remain high this week as investors continue to digest the market landscape.
Economic Data this Week:
Monday: Markit PMI, FR Markit manufacturing
Tuesday: IFO Business Climate
Wednesday: FOMC Rate decision, Bank of Canada rate decision
Thursday: Jobless Claims, US Durable Goods
Friday: Univ. of Michigan sentiment
January 24, 2022
EUR/USD 1.1296 GBP/USD 1.3472 USD/CAD 1.2639 AUD/USD 0.7107 USD/JPY 113.85 USD/CNH 6.333 USD/ILS 3.1783 USD/MXN 20.5652 USD/CHF 0.9145 USD/INR 74.5687 USD/BRL 5.4923 USD/SGD 1.3466 USD/DKK 6.5895 USD/SEK 9.3235 USD/NOK 9.0043
The greenback hits two-week highs as equities drop and treasury yields flatten in anticipation of Wednesday’s Fed decision. Markets will pay close attention to any signal that the Fed could raise rates more than four times in 2022 in efforts to tamper inflation as CPI hit 7% YOY – the fastest pace in 40 years. Traders price in a 95% chance of a rate increase in March.GBP
The pound sheds nearly 0.60% to January lows amid dollar strength. The pound gave back all gains acquired since the start of the year.EUR
The euro also gave back nearly 0.50% to the dollar as the common currency is weighed down by tensions between Russia and Ukraine. Given the eurozone gets 50% of oil supplies from Russia there are concerns that some eurozone nations may be unwilling to take a stand vs. Moscow. The Swiss franc hit the highest level since June 2015 as save havens outperform.CAD
Canadian dollar loses ground vs. the greenback amid eroded risk sentiment offsetting any hawkish sentiment spurred by BoC meeting this week. Crude oil prices are set for a third day of losses.ASIA/PACIFIC
USD/JPY climbs slightly as safe haven currencies outperform and treasury yields sink.
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