Analyse du marché des changes

janv. 27, 2022 | Analyse du marché des devises

Thèmes globaux

The U.S. dollar soared to 1 ½ year highs after the Fed signaled it could take an even bolder approach to taming inflation. The dollar rolled to three- and five-week highs against the loonie and sterling, respectively, and climbed to its highest since June 2020 versus the euro. While the Fed’s statement was moderately hawkish, the post-meeting press conference by Chair Powell was what catapulted the greenback significantly higher. Mr. Powell left open the possibility of raising rates by a bold 50 basis points next month which led markets to price in the risk of more than four rate increases this year. Consequently, the market sees scope for the Fed’s main rate to end 2022 around 1% to 1.5%, compared to its own estimate in December of less than 1%. The Fed’s more hawkish outlook could be a tougher pill for markets to swallow, keeping volatility elevated, and boosting the dollar’s safe haven standing.

CAD

Oil rising to new 7-year highs near $90 helped to slow the loonie’s fall against the Fed-excited greenback. Canada’s dollar fell to three-week lows after the Bank of Canada somewhat unexpectedly held fire on raising interest rates which painted a slightly less hawkish outlook compared to the Fed. Markets now price a near certainty of a rate increase from 0.25% in early March.

USD

The dollar pushed to fresh highs after U.S. data bolstered the case for an aggressive initial rate hike from the Fed. Weekly jobless claims improved to 260,000, down from 290,000. Durable goods tumbled 0.9% in December but was offset by a stronger 3.2% increase in November. U.S. growth proved stronger than expected last quarter as the economy grew at a 6.9% annual rate in October-December. Brisk growth underscored Fed Chair Powell’s assertion that the economy is in a better place entering a rate hiking cycle than last time in 2015.

GBP

Although the Bank of England moved ahead of the Fed in raising interest rates, the Fed could quickly catch up and raise rates more aggressively than its UK counterpart this year. That’s the view that knocked the pound to five-week lows against the dollar. Sterling is also losing favor to the safer greenback as global equity market volatility persists as traders recalibrate expectations for U.S. interest rates.

EUR

The euro plunged to mid-2020 lows after a hawkish Fed kicked open the door to the prospect of larger and faster rate increases this year to bring down inflation. The Fed is on track to raise rates in March and could possibly do so by a bold 50 basis points given the U.S. economy’s stronger foundation compared to its previous starting point entering a rate hiking cycle. The specter of wider interest rate differentials between the euro and dollar leave the former at greater downside risk.


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