EUR/USD, GBP/USD, USD/CAD, USD/JPY – U.S. Dollar Gains Ground After Williams’ Comments
- EUR/USD lost momentum and pulled back towards the 1.0720 level.
- USD/CAD settled back above the 1.3400 level.
- USD/JPY received support near the 20 EMA and rebounded towards the 131.50 level.
U.S. dollar gains ground against a broad basket of currencies as traders react to the comments of Fed’s Williams.
New York Federal Reserve Bank of New York President said that it was reasonable to expect a peak rate of 5% – 5.25%.
Treasury yields continue to move higher as bond traders believe that the Fed may have to push the federal funds rate above the 5% level to fight inflation. Rising Treasury yields are bullish for the U.S. dollar.
EUR/USD settled near 1.0720 after an unsuccessful attempt to climb above the 1.0750 level. Traders stay focused on the outlook for Fed policy. Yesterday, EUR/USD found support near the 50 EMA at 1.0670. In case Treasury yields continue to move higher, EUR/USD will have a decent chance to settle below this support level.
GBP/USD tried to climb above the 1.2100 level but lost momentum and pulled back towards the 1.2050 level. From a big picture point of view, GBP/USD is trying to stabilize after the recent pullback. In case this attempt is successful, GBP/USD will have a chance to test the 50 EMA at 1.2130.
USD/CAD settled back above the 1.3400 level as the U.S. dollar moved higher against a broad basket of currencies.
Other commodity-related currencies have also found themselves under pressure in today’s trading session. AUD/USD declined below the 0.6950 level, while NZD/USD moved towards the 0.6300 level.
USD/JPY found support near the 20 EMA at 130.65 and is trying to settle above the 131.50 level. Most likely, USD/JPY traders will stay focused on general dynamics of the U.S. dollar in the upcoming trading sessions.
For a look at all of today’s economic events, check out our economic calendar.