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US Dollar falls after showing a 1.9% jump last Friday


21.06.2021
US Dollar falls after showing a 1.9% jump last Friday

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar         1.2350-1.2450

Euro                 1.4725-1.4825

Sterling            1.7200-1.7300

 

The US Dollar index is marginally weaker this morning but that is only after it had another strong day on Friday, the US Dollar jumped more than 1.9% last week which was the biggest jump in the Greenback since March of 2020. This of course was all brought on by the US Federal Reserve saying that it may end its stimulus program earlier than first thought and it was looking at an increase in interest rates in early 2023.

 

Overnight the US 10-year interest rate dropped below the 2.0% level for the first time since February as volatility returned to the markets and the belief that perhaps inflation is only temporary seems to have taken hold with the financial markets. Stocks which were much lower last week after the Fed announcement have rebounded in Europe this morning and the US market looks set to test higher on the North American opening.

 

The Canadian Dollar recovered a little overnight but that was only after USD.CAD reached a new high of 1.2470 (0.8019) on Friday which is the currency pairs highest levels in months. Once again, we see the Canadian Dollar very susceptible to a strengthening US Dollar and all the good work the Loonie did in the past few months was washed away over the course of a couple of sessions.

 

Lots of data this week including some US Growth numbers but the early highlight will be Fed Chair Powell's testimony to congress starting tomorrow where questions will be asked on his plan for the removal of stimulus and the increasing of interest rates in the US, we could see more volatility in the market this week so get ready with your orders.

 



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