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The dollar is stronger as markets react to yesterday’s Fed comments. DXY rose 0.50% to the highest level in a month beating all G-10 peers. Markets are now pricing in five rate hikes for this year as the Fed works to control inflation. Also key data out this morning includes Durable Goods which dropped 0.9% MOM in December (worse than expected), weekly Jobless Claims which dropped to 260K – in line with expectations, and GDP which outperformed.
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FX Rates
January 27, 2022Rates are not real time. Rates are today's indicative mid-market rates as of time of publishing, which may vary. Please contact SVB for a current quote.
EUR/USD 1.1148 GBP/USD 1.3378 USD/CAD 1.2676 AUD/USD 0.707 USD/JPY 115.46 USD/CNH 6.3693 USD/ILS 3.198 USD/MXN 20.7163 USD/CHF 0.9321 USD/INR 75.0737 USD/BRL 5.3682 USD/SGD 1.3526 USD/DKK 6.6765 USD/SEK 9.3556 USD/NOK 8.9461
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USDAs expected, Fed Chair Jerome Powell positioned for an interest rate hike in March and clearly stated that policy makers will need to act to help cool inflation. After interest rate hikes begin, the Fed will begin shrinking its balance sheet. Traders now price in five rate hikes this year. Also helping the dollar is strong data including Durable Goods and GDP which showed the economy growing 6.9% in Q4 – well above expectations of 5.3%.GBPThe pound fell close to 1-month lows in reaction to the Fed meeting yesterday. The Bank of England meets next week where a move to tighten monetary policy would shore up lower support.EUR
EUR dropped 0.20% versus the dollar to the lowest levels since June 2020. The move is predicated by sustained dollar strength and dovish comments from ECB policy member Kazimir on inflation.
CADThe Canadian dollar slipped versus a stronger greenback despite rises in oil futures as the BoC kept rates unchanged. Markets price in four rate hikes, with the first in March, for Canada this year.ASIA/PACIFICUSD/JPY continues to climb for a third session amid a flatter treasury curve. Nearby resistance in the upper bound is 115.50 which is the last resistance before highs of 116.35; which was the yen's weakest point since 2017.
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| Source: Bloomberg | |
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