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Setbacks for US dollar as Turkish lira rides a roller coaster

By Piero Cingari

09:42, 21 December 2021

Turkish lira, US dollar and euro banknotes
US dollar dips while Turkish lira’s roller coaster ride continues – Photo: Shutterstock

The dollar softened against other major currencies on Tuesday morning trading in Europe, following yesterday’s risk-off session marked by growing fears over Omicron and uncertainty over the future of President Biden’s spending plans.

The DXY index, which measures the US dollar against a basket of six major currencies, was broadly flat at 96.35 (-0.2% on the day) by 11:00 GMT (UT).

  • EUR/USD edged up to 1.1294 (+0.17%)
  • USD/JPY held steady at 113.64 (0.05%)
  • USD/CHF was flat at 0.9205 (-0.05%)
  • GBP/USD rose to 1.3254 (+0.36%)

The Turkish lira emerged from the ashes of a currency crisis, with USD/TRY down by nearly 30% compared to yesterday, after President Recep Tayyip Erdoğan presented a new plan to defend local currency deposits against depreciation. President Erdoğan also announced a 10% reduction in withholding tax on dividend payments made by companies.

Risk sentiment improved towards high-beta and commodity currencies after yesterday’s sell-off. The Australian (AUD) and New Zealand (NZD) dollars strengthened against the USD, and the Norwegian krone (NOK) also rebounded. 

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  • AUD/USD edged up to 0.7127 (+0.25%)
  • NZD/USD climbed to 0.6749 (+0.54%)
  • USD/CAD was unchanged at 1.2933 (-0.06%)
  • USD/NOK declined to 9.0053 (-0.39%)

Forex Daily Matrix – 21 December 2021

A forex table that compares nine major currencies against each other, including USD, EUR, GBY, JPY, CHF, AUD, NZD, CAD and NOKForex Daily Matrix as of 21 December 2021, 11:00 GMT – Credit:

US Dollar

At time of writing, the US Dollar Index (DXY) was at 96.38, up 0.5% on the day.

The dollar took a breather after Democratic Senator Joe Manchin of West Virginia announced his withdrawal from President Biden’s Build Back Better Act on Sunday, effectively undermining the $1.75trn tax and spending proposal that incorporates the Democrats’ core domestic policy priorities.

Goldman Sachs analysts cut their growth predictions for the United States for 2022 yesterday, citing a more negative fiscal impact than projected. The bank’s experts now estimate GDP growth of 2% in the first quarter of 2022, a 3% increase in the second quarter and a 2.75% rise in the third – down from 3%, 3.5% and 3% growth, respectively.

The Omicron variant continues to spread rapidly in the US, now accounting for 73% of all sequenced Covid-19 cases, up from around 3% last week. President Biden will talk later today about the country’s pandemic response in light of the escalating number of Omicron cases.

US dollar (DXY) technical levels:

  • 52-week high: 96.82
  • 52-week low: 89.22
  • 50-day moving average (one-day chart): 95.16
  • 200-day moving average (one-day chart): 92.80
  • 14-day Relative Strength Index (RSI) (one-day chart): 56

Chart of the day: Turkish lira on a rollercoaster ride

A chart showing the wild ride of the Turkish liraUSD/TRY (inverted) chart – Credit: Tradingview

British pound

By 11:00 GMT today, the cable (GBP/USD) was trading at 1.1294, up 0.4% on the day, while EUR/GBP was 0.2% lower at 0.8519.


0.67 Price
+1.060% 1D Chg, %
Long position overnight fee -0.0073%
Short position overnight fee -0.0009%
Overnight fee time 22:00 (UTC)
Spread 0.00040


1.27 Price
+0.640% 1D Chg, %
Long position overnight fee -0.0046%
Short position overnight fee -0.0036%
Overnight fee time 22:00 (UTC)
Spread 0.00170


146.85 Price
-0.960% 1D Chg, %
Long position overnight fee 0.0113%
Short position overnight fee -0.0195%
Overnight fee time 22:00 (UTC)
Spread 0.090


0.67 Price
+1.060% 1D Chg, %
Long position overnight fee -0.0073%
Short position overnight fee -0.0009%
Overnight fee time 22:00 (UTC)
Spread 0.00040

Although the Bank of England surprised markets last week by tightening monetary policy, the pound was pulled down by global risk aversion as a result of the spread of Omicron and domestic political headlines.

Prime Minister Boris Johnson is embroiled in a battle with his own cabinet about enforcing new coronavirus restrictions as Christmas approaches, while yesterday health secretary Sajid Javid refused to rule out further meaures being implemented before Christmas.

GBP/USD technical levels:

  • 52-week high: 1.4248
  • 52-week low: 1.3133
  • 50-day moving average (one-day chart): 1.3464
  • 200-day moving average (one-day chart): 1.3757
  • 14-day Relative Strength Index (RSI) (one-day chart): 44


EUR/USD was last at 1.1262, down 0.4% on the day.

The economic outlook in the eurozone remain clouded by recent pandemic developments. Consumer confidence in Germany, according to the GfK survey, fell more than expected to -6.8 points (the lowest since June), down from -1.8 previously.

This afternoon, the EU Commission will publish preliminary data on household morale in the euro area for December, which are likely to indicate a similar decline in response to the spike in infections and the consequences of energy price hikes.

The Bundesbank indicated that the German economy may fall this quarter as a result of the increase in Covid-19 infections. The Netherlands has already implemented a Christmas lockdown, and EU Commissioner Ursula von der Leyen has warned that by mid-January, the Omicron strain might be dominant in Europe.

EUR/USD technical levels:

  • 52-week high: 1.2349
  • 52-week low: 1.1184
  • 50-day moving average (one-day chart): 1.1425
  • 200-day moving average (one-day chart): 1.1774
  • 14-day Relative Strength Index (RSI) (one-day chart): 46

Forex Performance Heatmap – 21 December 2021

A forex table showing the performance of the US dollar and the euro against other currenciesForex Performance Heatmap as of 21 December 2021, 11:00 GMT – Credit:

Other currency pairs (% change from previous close):

Read more: Turkish lira slumps to a new low after interest rate cut

Markets in this article

0.66782 USD
0.007 +1.060%
11.63150 USD
-0.16097 -1.370%
4.33075 USD
-0.03333 -0.770%
11.30372 USD
-0.13542 -1.190%
1.08873 USD
-0.00058 -0.050%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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