Cautious Fed holds further upside for the greenback
USD: Federal Reserve Chair Powell halting the dollar upside Fed Chair Powell stuck to his mantra of caution in his testimony yesterday and, despite the sharply rising US consumer price index (CPI), he pointed out that it is too early to start thinking about imminent tightening and that any reduction in QE purchases is still way off. With the Fed still believing in the transitory nature of inflation pressures and no imminent and premature tightening on the cards, this suggests the CAD and other currencies where central banks are beginning to tighten should remain supported over the coming months.
CAD: USD/CAD was lower heading into the BoC meeting, presumably as speculation grew that the BoC would be more hawkish than expected. The bank delivered as expected, tapering from C$3b to C$2b and leaving the forecast for the output gap closure at 2H 2022. The BoC also tweaked forecasts, 2022 GDP Growth was upgraded from 3.7% to 4.6% which saw USD/CAD hit the low of the day at 1.24205, before moving back above 1.2500. The OPEC+/UAE news may well be weighing on the loonie as Oil comes under pressure. Given the different pressure points for the currency, most expect the USD/CAD to trade between the 1.2410- 1.2600 window in the short term.
EUR: Powell's comments yesterday managed to halt the EUR/USD decline but rather than looking for a meaningful reversal in EUR/USD, a stabilization in the pair is more likely over the coming weeks as the Fed is nonetheless closer to policy normalization than the ECB. Still, the cautious comments from Chair Powell should help to reverse the recent losses in European FX, particularly where central banks are expected to begin a monetary tightening cycle.
GBP: Both solid UK employment numbers this morning and June's CPI yesterday were a modest positive for GBP. Based on short-term financial fair value models the GBP remained undervalued against its peers and is likely to remain supported in the short term.
Get access to our market experts and sign up to receive the latest updates on any currency with our real-time exchange rate reports.
Sign up to receive the latest market news from our experts.
Who can use the MTFX payment service?
Individuals and businesses who need to send money in foreign currency internationally can use MTFX’s services. The beneficiary of the transfer must have a bank account for the funds to be paid into.
Personal clients usually use our services to transfer money between their own accounts in two different countries.
Business clients usually use our services to transfer funds to suppliers, fund international operations, or repatriate overseas earnings.
Why should I use MTFX and not my own bank?
MTFX offers currency exchange rates that are 2-5% better than those offered by the banks. Personal clients usually save hundreds of dollars per transfer and for larger transfers, the savings can run into the thousands.
We also offer excellent customer service, dedicated currency specialists, and a 24/7 online platform with best-in-class technology that allows you to complete transfers from any device virtually anywhere in the world.
Business customers save with better currency exchange rates and proven solutions geared towards managing and mitigating foreign exchange risk. Our solutions include forward contracts, market orders, rate alert services, and much more - all backed by great technology and great people.
How do customers send funds to MTFX?
Funds can be transferred via wire transfer, Electronic Funds Transfer (EFT), or ACH payment services. MTFX maintains bank accounts in all major currencies with highly-rated banks. Our banking infrastructure ensures that you can transfer funds to us quickly and securely.
How long does it take MTFX to transfer funds?
Our global network of banking partners allows us to get funds to virtually anywhere in the world quickly and efficiently. Most wire transfers from MTFX will be received by your beneficiary within 24-48 hours. MTFX also offers same-day transfers that are almost instantaneous, as well as low-cost in-country payment services for your less urgent transfers. For further information please speak to one of our currency specialists.