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Global inflation hits new highs

April 21, 2022

EUR/USD: The euro strengthened on Wednesday as upbeat German producer prices data boosted the euro across the board. German producer prices rose an annual 30.9% in March. March’s figures mark six consecutive months of increasingly steeper increases, mainly due to rising energy prices, according to the statistics office. The jump in factory gate costs, considered a leading indicator for consumer prices, was the biggest since records started in 1949. Producer prices showed a jump of 4.9% compared to the previous month. Christine Lagarde will give a speech today. The lack of a rate hike plan could increase pressure on the euro. Immediate support is seen at 1.0810. A breakout below could take the pair towards 1.0750.

SELL STOP 1.0810/TP 1.0750/SL 1.0830


USD/CAD: The Canadian dollar strengthened to its highest level in more than three weeks against the U.S. dollar on Wednesday, as domestic inflation data bolstered expectations for another upsized interest rate hike from the Bank of Canada in June. Canada’s annual inflation rate accelerated faster than expected in March, hitting a 31-year high of 6.7%, amid broad price pressures. Last week, the Bank of Canada raised its benchmark rate by half a percentage point, its biggest single hike in more than two decades, and opened the door to lifting interest rates above a neutral setting for the first time in 14 years. Its next policy decision is due in June. Immediate support is seen at 1.2460. A breakout below could take the pair towards 1.2400.

SELL STOP 1.2460/TP 1.2400/SL 1.2480


GBP/USD: The British pound climbed against a broadly weak dollar on Wednesday, ignoring Prime Minister Boris Johnson’s political woes, with attention focused on potential policy signals from the Bank of England (BoE) this week. British lawmakers are due to vote on Thursday on whether Johnson should be referred to parliament’s privileges committee for an inquiry into breaches of lockdown rules, after his apology to parliament on Tuesday. Immediate support is seen at 1.3020. A breakout below could take the pair towards 1.2950.

SELL STOP 1.3020/TP 1.2950/SL 1.3040