The U.S. dollar is slightly stronger to start the week, erasing its losses from Friday’s post-inflation data session.
Overview
Friday’s consumer price index confirmed inflation is growing at its fastest pace since 1982. However, the print did not surprise to the upside which would have put extra pressure on the Federal Reserve to raise rates more quickly, putting modest downward pressure on the dollar on Friday.Attention has shifted to this week’s slew of central bank meetings. Nearly 20 central banks around the world are due to hold meetings this week. The Federal Reserve will conclude its two-day meeting on Wednesday. Just about everyone expects the Fed to speed up stimulus withdrawal. It is expected that the central bank will pave the way for interest rate hikes perhaps as early as Q2 of 2022. Any movements in currency markets could be short-lived as traders square up bets head of the meeting. There is no fundamental data out today either so traders will focus on general risk sentiment and position squaring.
What to Watch Today…
- No major economic events scheduled for today
WOW, IT’S A ‘FOUR-PEAT’ | Top MXN Forecaster for Last 4 Quarters
Bloomberg ranks Monex for MXN, G10 Currencies, and NZD! Learn More
CAD
The Canadian dollar is down today, slipping for the fourth straight day. Crude oil is down nearly a full percent, adding some downward pressure on the loonie. While the Bank of Canada is not one of the nearly 20 central banks meeting this week, we are still keeping a close in on monetary developments.
Bank of Canada Governor Tiff Macklem will hold a press conference with Deputy Prime Minister Chrystia Freeland to discuss the central bank’s inflation mandate renewal.
GBP
The British pound is again under pressure, giving up some of its relief-rally gains of Friday. GBP/USD is within a few tenths of its year-to-date low that it reached a few times last week. The Bank of England is expected to once again punt interest rate hikes until next year as the focus has shifted back to Omicron and away from rising inflation.
Prime Minister Boris Johnson warned of a “tidal wave” of infection. U.K. Health Secretary Sajid Javid added to the worry by stating that there’s no certainty the government will be able to keep schools in England open.
Ready to spin the currency market moves in your favor?
Discover HOW WE Can HELP You SEND or RECEIVE PAYMENTS
