November 21, 2022 19:59 GMT
- Concerns in China have been renewed as Beijing reported two more Covid deaths on Sunday amid a spike in cases, heightening concern the capital could see a return of tougher restrictions. The news has aided the greenback bid/recovery on Monday and the USD index has risen 0.8% throughout the session.
- USD strength has been broad based alongside pressure on major equity indices. The Japanese Yen and the Australian dollar are the weakest performers across G10.
- USD/JPY traded comfortably back above the previously well-held 100-dma resistance of 141.03 and the pair has significantly narrowed the gap with the next upside resistance level of 142.48, the November 11th high.
- The euro was also among the early victims to the greenback’s advance, weakening further upon release of an MNI interview with ECB's Lane. Lane flagged that the ECB will consider a slower pace of tightening at the December meeting, with the governing council weighing signs that bank lending conditions are already tightening against accelerating wage inflation.
- EUR/USD traded to a low of 1.0223 Monday, narrowing the gap with support at 1.0193 - the 38.2% retracement for the November upleg.
- Canadian retail sales and US Richmond Manufacturing are data points on Tuesday. There may be potential comments from Fed’s Mester, George and Bullard which will be monitored ahead of Wednesday’s FOMC minutes and the Thanksgiving Holiday. Wednesday will also see the RBNZ decision and the release of Eurozone PMIs.