The U.S. Dollar remained in familiar dominant ranges as it marks an eighth consecutive day of gains overall, primarily as a result of rising yields in the U.S. bond market based on high inflation expectations that will be accompanied by multiple interest rate hikes.
Overview
10-year yields in the U.S. market are now at their highest level since March 2019. Meanwhile, a combination of geopolitical developments, including the escalation of the Russian invasion and attack of the Eastern and Southern Ukraine regions. Things are looking bearish for stocks at the moment and there is no data until tomorrow to cause-effect.There is ongoing fear about how bad inflation could get with COVID lockdowns still in place in China and the length of the war. We shall see how the buck’s peers overcome the current status quo as currencies such as the Yen hit its weakest level in nearly twenty years following the downward pressures of monetary policy divergence.
What to Watch Today…
- No major economic events scheduled for today
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EUR
The Euro is trying to keep away from its weakest levels of the year which were reached last week as plenty of negative headlines rocked the continent. More than ever, EU leadership desires to integrate their economic output in order to prevent recessionary woes in the midst of an energy crisis. Germany reportedly is interested in providing Ukraine with more weapons to combat Russian attacks on the East while Austrian Chancellor Karl Nehammer is said to be visiting Moscow today to meet Russia’s leader Vladimir Putin. As the conflict continues, the Euro’s volatility remains high.
CAD
The Canadian Dollar lost some ground as it is currently being pulled into negative territory by the stronger headwinds faced by the global economy along with lower oil prices. The idea of a slow down worldwide is having a negative impact, greater than any positive effect that could have been expected from a strong jobs report last week. Odds of a 50-basis-point move at the Bank of Canada on Wednesday are at their highest, but it seems this is already priced in by traders. We shall see if any dovish sentiment clouds the future further for “Loonie” or if hawkishness manages to put it back on an appreciation track.
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