The US Dollar dips whilst stocks rally, in response to Jerome Powell's speech on normalizing policy. Boris Johnson faces MPs today as pressure mounts for him to resign amid the most recent lockdown gathering revelation.
January 12, 2022
GBP/USD 1.3633 GBP/EUR 1.1993 EUR/USD 1.1367 USD/CAD 1.2552 EUR/CHF 1.0499 EUR/SEK 10.2766 EUR/NOK 9.9425 EUR/DKK 7.4409 USD/ILS 3.1136 AUD/USD 0.7206 NZD/USD 0.6782 USD/SGD 1.3509 USD/JPY 115.34 USD/CNH 6.3702 USD/INR 73.94 EUR/ILS 3.5401 GBP/ILS 4.2450 USD/ZAR 15.4707
Sterling gained 0.3% yesterday, to trade above two-month highs against the greenback amid broad dollar weakness. GBPEUR also rallied to trade just above the key 1.2000 level at time of writing. The pound remains supported as daily Covid cases continue to fall, suggesting the peak has been reached.
Boris Johnson is facing intensifying pressure from his own party, after an e-mail was released yesterday showing an invite to around 100 members of staff to a Garden party at No 10 Downing Street, during last Mays strict lockdown. Reports suggest letters of no confidence have been handed to Graham Brady.EUR
The Euro was little changed on comments from ECB members yesterday morning, where Christine Lagarde confirmed that they are taking inflationary pressures very seriously. Support was echoed by members Villeroy and Kazaks, who cited that the ECB will act when necessary to maintain inflation.
The euro has risen above the 55-day moving average, with higher highs and higher lows developing against the Dollar. EURUSD has gained 0.3% this morning to test the 1.1370 level of resistance.USD
The Dollar lost ground against a basket of currencies yesterday, as Powell confirmed that the Fed is on track to move policy “closer to normal” over the course of the year. The Fed Chair argued that inflationary pressures should ebb on their own as supply chain issues and labour shortages caused by the pandemic ease.
The DXY is down 0.25% since yesterday. Stocks rose and the recent sell-off in Treasuries finally ran out of steam on the comments, the 10-year treasury note dipped 0.02% whilst the Nasdaq and S&P gained 1.4% and 0.9% respectively.ASIA/PACIFIC
Asian stocks rallied on Powell’s comments. The tech-heavy Hang Seng added 2.6% whilst the Shanghai composite gained 0.8% on the prospect of looser monetary conditions. Chinese inflation calmed in December, giving the PBOC scope to cut rates if necessary to support the countries economic downturn.ILS
USDILS is down 0.26% amid ongoing dollar weakness. After a brief breakout of the range yesterday, the pair returns back to the 3.1200 level at time of writing.Data & Events
Euro Area – Industrial Production
US – MBA Mortgage Applications
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