The US dollar trades mixed against its peers: strengthening versus the Japanese yen while trading lower versus sterling, euro and the Canadian dollar. The Japanese yen hit levels not seen in six years while the monetary policy divergence between the two nations continues to widen in favor of the US. The Canadian dollar continues its winning streak with USD/CAD trading lower for the ninth session out of the last ten.
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March 22, 2022
EUR/USD 1.1030 GBP/USD 1.3262 USD/CAD 1.2580 AUD/USD 0.7448 USD/JPY 120.50 USD/CNH 6.3740 USD/ILS 3.2180 USD/MXN 20.2595 USD/CHF 0.9315 USD/INR 76.1820 USD/BRL 4.9300 USD/SGD 1.3565 USD/DKK 6.7450 USD/SEK 9.4110 USD/NOK 8.7145
The US dollar strengthened against the Japanese yen as investors digest hawkish comments from Fed Chair Jerome Powell. Benchmark US Treasury yields popped another 5 bps higher after jumping 14 bps on Monday following Powell’s comments in support of raising interest rates as much as 50 bps next meeting if needed.GBP
Sterling is trading as much as 0.5% stronger than the US dollar. Later today, the only BOE deputy governor to vote in favor of keeping interest rates unchanged last week will speak.EUREUR/USD remains largely unchanged, trading slightly higher. In Germany, the finance chief proposed a “Marshall Plan” which would help Ukraine rebuild after the war ends.CADThe Canadian dollar is on track for its longest winning streak in a year. A sustained break below key support levels of 1.2585 could test 1.2400.ASIA/PACIFIC
USD/JPY is trading almost 1% stronger at a six-year high as expectations for a growing divergence in monetary policy between the US and Japan becomes priced into the market. This move comes after Fed Reserve Chair Jerome Powell suggests he is ready to raise interest rates by 50 bps at next week’s meeting if needed. The Fed is expected to raise interest rates 7 times this year compared to the Bank of Japan which has pledged to maintain an ultra-loose monetary policy.
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