Central Bank Mayhem Subsides As Festive Wind Down Begins
XM Group | Dec 17, 2021 09:07AM ET
Can the aussie, kiwi and loonie find some love?
It’s been a surprisingly dismal year for the major commodity-linked currencies. The Australian and New Zealand dollars started 2021 with gains but slipped into losses as unexpected lockdowns and the resiliency of their US counterpart undermined their appeal. The Canadian dollar has fared somewhat better and could finish the year mostly flat.
The core PCE price index – the Fed’s preferred price metric – is forecast to have edged up from 4.1% to 4.5% y/y in November. In addition, consumption is expected to have remained strong, rising by 0.6% month-on-month.
The US dollar took a dive after the Fed decision as Treasury yields slid. This could simply have been a case of buy the rumour, sell the news for the greenback. But things could easily switch around again if investors are reminded that it may take a few more months at the very least before the inflation picture improves.
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