The US dollar is beginning to fight back. After losing momentum and giving back a large chunk of recent gains following the latest US inflation data, the buck is finally starting to find some bids.
GBPUSD hit the dizzy heights of $1.20 a couple of weeks back, since then the pair has struggled to regain momentum and recently fell as low as the bottom half of the $1.17 handle. For the EURUSD pair, the same is true. After almost tapping the $1.05 level, the world’s most traded currency pair has slipped into the low $1.02s.
Whilst the case for peak US inflation is strong, it still does not remove the overwhelming case for remaining in the US dollar. Both the superior interest rate yield mixed with the strength of the economy is very good reasons alone for a pick up in dollar demand. Watch this space…
Written by Viv Savani. 6:19am, November 22nd 2022
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