Daily Forex Market Report 22-Nov-2022: USD loses some of its gains, China 1st Covid death in 6 months

Sharp drop in German producer prices interpreted as sign of a big recession ahead added to EUR weakness

The US dollar is giving up some of its recent gains on Tuesday, with the New Zealand dollar one of the notable upwardly mobile pairs ahead of an expected aggressive rate hike tomorrow.

For currency traders who were not too distracted by the World Cup football, it has been a relatively quiet 24 hours.

China and the implications for a further handbrake on global growth has been a big focus as a return to lockdowns are anticipated in the People’s Republic following the weekend news that they’d had their first Covid death in six months. The biggest currency move over the past day has been the dollar-rouble, aka Barney, up 3.3%, with nothing else moving much more than 0.5%.

For the pound, after a down and up day against USD yesterday, it is up 0.2% today at 1.1847, and flat against the euro at 0.8666.

EUR/USD is also flat at 1.02624 after the single currency yesterday fought back from the decline seen in the second half of last week.

Yesterday, a sharp drop in German producer prices was interpreted as a big recessionary sign and added to the EUR weakness.

With a national holiday in Japan, USD/JPY is also taking a bit of a breather at 141.847, having wriggled from below 139 just over a week ago.

Events and data to watch today include a speech from Reserve Bank of Australia Governor Lowe this morning, eurozone current account numbers this morning and consumer confidence later, Canada housing and retail figures, while in the US it’s the Redbook index and Richmond Fed manufacturing index.

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