Daily currency update
The dollar’s advance continues unabated, with EUR/USD hitting a new 12-month low during this morning’s Asian session. The pair reached 1.0534, its lowest level since November 1, 2023, after confirmation that Republicans had secured the 218-seat threshold to gain a majority in the House of Representatives. With several seats still undecided, it appears the Republican majority may grow, potentially easing the passage of party legislation through Congress.
In Washington, President-elect Trump met with President Biden at the White House, where both reassured reporters that the transition would proceed smoothly as Trump prepares to take office for a second term on January 20. Meanwhile, GBP/USD dropped below 1.27 for the first time in three months yesterday, with the pair now trading around 1.2680.
Key movers
Outside of politics, notable data emerged from the U.S. yesterday as the monthly Consumer Price Index rose from 2.4% to 2.6% year-over-year, broadly in line with estimates. The dollar briefly dipped following the release, but quickly reversed these losses and gained strength as the day progressed.
Today’s main focus is on speeches from the heads of the European Central Bank, U.S. Federal Reserve, and Bank of England. Christine Lagarde of the ECB will speak first in Paris at 7 p.m., followed by Fed Chair Jay Powell in Dallas at 8 p.m., and concluding with the annual Mansion House speech by BoE Governor Andrew Bailey at 9 p.m. Key points of interest will include any remarks on how Trump’s victory may impact the economic landscape.
Expected ranges
GBP/USD: 1.2600 – 1.2770 ↓
GBP/EUR: 1.1980 – 1.2085 ↑
EUR/USD: 1.0465 – 1.0595 ↓
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