New York






Dollar declines below support levels

13 Jan 2022

The U.S. Dollar fell under key support levels on Thursday, standing at $1.1443 in Asian trading. The currency declined 0.6% against the Euro the previous day to $1.1453, the lowest since mid-November.

The greenback also fell 0.6% against the Yen, edging under support around 115 to a fortnight-low of 114.38. Moreover, the Dollar weakness bolstered the Australian Dollar to close to a two-month high of $0.7292.

December inflation figures coming out of the U.S. on Wednesday were only slightly higher than predicted, and the 7% year-on-year increase in CPI was as forecast, Reuters reports.

"I don't think it was anything within the components of the CPI that caused the market to take a sigh of relief," according to NatWest markets' strategist Jan Nevruzi.

"Would a 6.7% or 7.3% print really have changed the Fed's trajectory in the next few months or this year – I do not think so."

Elsewhere, the New Zealand Dollar and Sterling were the best performing major currencies in Asian trading on Thursday. The Pound is putting its 200-day moving average to the test at $1.3717. Forecasts for rate hikes as soon as February by the Bank of England have led to a Sterling rally, rising 4% from lows in December. Up to now, traders have dismissed the political crisis being faced by Prime Minister Boris Johnson on reports of a party held at Downing Street during the first Covid lockdown.

In addition, the New Zealand Dollar hit its 50-day moving average at $0.6862, a 0.2% rise during the session. The Canadian Dollar has rallied over 3.5% in three weeks, whilst the U.S. Dollar index stood near a two-month low of 94.962.