The U.S. Dollar is trading in favorable ranges this morning, rising along with treasury yields and equities as volumes pick up with businesses back in session.
Overview
The transition to 2022 has been one characterized by concern as the Omicron variant hit everyone as an indication of regression in the fight against the coronavirus as well as further impediment to a more robust recovery economically.Nevertheless, the year seems to be starting off on better news as reports globally tend to agree that the new variant has not meant an increase in deadliness or hospitalizations. In fact, some studies are now concluding that we are nearing an end to the pandemic this year, but we are not free to do as we please yet.The risk-on sentiment is affecting all other safe-havens, in particular the Japanese Yen, which is currently at its weakest point since January of 2017. Investors seem relieved that Omicron may not play a significant role in slowing down growth as much as previously feared. Energy costs continue to rise as demand is predicted to pick up to make up for lost ground the past two years.
OPEC+ will meet today to discuss the production. Today we will get a chance to look at December ISM Manufacturing, which was expected to expand almost as much as November, and JOLTS Job Openings to gauge if Omicron impacted labor. Tomorrow will see the release of the Fed Minutes from the last meeting.
What to Watch Today…
- ISM Manufacturing 10 AM
- JOLTS Job Openings 10 AM
WOW, IT’S A ‘FOUR-PEAT’ | Top MXN Forecaster for Last 4 Quarters
Bloomberg ranks Monex for MXN, G10 Currencies, and NZD! Learn More
EUR
The Euro fell to its weakest point since mid-December after the greenback took off overnight based on the faith in the potential growth for the U.S. economy going into 2022. U.S. 10-year, as well as two-year treasury yields, climbed based on awaited tightening by the Federal Reserve as well as the potential for higher inflation as the economy deals with supply-chain issues.
COVID has affected Europe lately as residents faced lockdowns and other safety measures, particularly when it comes to limiting travel. Economic indicators suggest progress has been limited with Germany’s Purchasing Managers Index figures underwhelming. We shall see if Euro remains down in the face of more COVID-related inactivity.
CAD
The Canadian Dollar fell a bit like all else against the buck but remains in elevated ranges after a strong December that witnessed it surge by 1.5% for the month. OPEC+ meeting could mean appreciation if indeed barrels go up in price.
Another factor adding to CAD prospects for strengthening is the situation developing in Libya dealing with a damaged major pipeline. Expect news items to cause a lot of fluctuation and an unclear outlook.
Ready to spin the currency market moves in your favor?
Discover HOW WE Can HELP You SEND or RECEIVE PAYMENTS
