Dollar breaks key support, Reuters rate hikes unchanged from inflation data

Author: Tom Westbrook

SYDNEY (Reuters) – The dollar fell below its main support level on Thursday as new commodities rose overnight, with data showing US consumer prices rising at its fastest pace in nearly 40 years and not worrying enough to change the hourly rate forecast.

After a tight period of a couple of months, the dollar fell 0.6% against the euro overnight to $ 1.1453, the lowest since mid-November. There is not much resistance to the charts in the face of further losses of up to $ 1.1525. Asia was at $ 1.1443.

It fell 0.6% from the yen to around 115.38 per dollar, which fell by about 115 yen, a low of more than two weeks. He last bought 114.63 yen in early Thursday.

They benefited from risk-sensitive currencies. The Australian dollar rose more than 1%, the best percentage gain since October, and the 50-day moving average rose to almost $ 0.7292 in almost two months. [AUD/]

The US monthly inflation figures were partly higher than expected and at 7% were the largest year-on-year increase in the CPI since June 1982.

But the Federal Reserve is pushing higher rates and reducing the balance this year to limit it already. The futures of Fed funds have already seen a threefold rise in 2022 and have begun to bail out some long dollars as there is so much price.

“I don’t think the market has calmed down within the components of the CPI,” NatWest markets strategist Jan Nevruzi said in a statement.

“A few tenths of the basic points of difference on both sides of the consensus are much less important when the CPI was at 1/3 of the current pace,” he added. “Whether the 6.7% or 7.3% print would really change the Fed’s trajectory in the coming months or this year – I don’t think so.”

The New Zealand dollar jumped 0.9% in two months after the US inflation printout, and the 50-day moving average was testing at $ 0.85853 in the Asian session.

Sterling, as traders believe the UK economy can survive a surge in COVID-19 cases, and the Bank of England is set to start rate hikes next month, testing its 200-day moving average at $ 1.3708. .

It has risen 4% from its December low and traders have so far ruled out Prime Minister Boris Johnson’s apology for attending a party in the garden of Downing Street at Britain’s first coronavirus blockade.

The Canadian dollar also rose more than 3.5% in three weeks, gaining with oil prices as investors overcame a potential economic downturn for the Omicron variant. It is next to a two-month low at 94,991.

Later on Thursday, Fed Governor Lael Brainard will appear in Congress to hold a hearing on the appointment of the vice president, and the Fed is holding its first meeting of the year in two weeks.

“The dollar should not be raised because the Fed is preparing for a tightening cycle,” said Commonwealth Bank of Australia (OTC 🙂 strategist Joe Capurso.

“It’s not a simple equation of the Fed’s rise, which is the same as the rise of the dollar. The dollar is a countercyclical currency that is shrinking as the world economy recovers.”

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Currency supply prices at 0107 GMT

Description RIC Latest US Close Pct Switch YTD Pct High Bid Low Bid

Previous Change

Session

Euro dollar

$ 1.1442 $ 1.1441 + 0.01% + 0.65% +1.1488 + 1.1440

Dollar / Yen

114.6250 114.5650 + 0.00% – 0.40% +114.7000 + 0.0000

Euro / Yen

131.14 131.14 + 0.00% + 0.63% +131.2400 +131.1300

Dollar / Switzerland

0.9144 0.9141 + 0.04% + 0.26% +0.9145 +0.9138

Pound sterling / dollar

1.3707 1.3705 + 0.03% + 1.37% + 1.3712 + 1.3698

Dollar / Canadian

1.2505 1.2506 – 0.01% – 1.10% +1.2509 +1.2498

Aussie / Dollar

0.7283 0.7284 – 0.02% + 0.19% +0.7288 +0.7278

NZ

Dollar / Dollar 0.681 0.6849 + 0.09% + 0.16% +0.857 +0.6844

All places

Places in Tokyo

European spots

Volatility

Information on the Tokyo Forex Market from BOJ