- Oil spikes on report tanker hit by Iran
- Global equities attempting to recoup yesterday’s losses.
- US dollar opens higher across the board.
USDCAD open: 1.3643, overnight range 1.3628-1.3671, close 1.3643, WTI 76.43, Gold 5165.71
The Canadian dollar is edging higher on the back of rising crude prices, and it may even be seeing some safe have demand due as a US dollar proxy.
Iran reported it struck an oil tanker in the Strait of Hormuz which gave WTI a boost. Prices rose from 75.07 to 78.07 before easing back to 76.79 in NY.
Asian equity markets recovered part of Tuesday’s decline. Japan’s Topix advanced 1.90%, Hong Kong’s Hang Seng gained 0.26%, and Australia’s ASX added 0.44%.
As of 7:10 am, European markets are largely steady. Germany’s DAX is up 0.14%, France’s CAC 40 has added 0.08%, and the UK FTSE 100 is higher by 0.12%. S&P 500 futures are down 0.11%. The US dollar index (DXY) is trading near 98.98, and the 10-year Treasury yield is 4.12%
EURUSD traded in a 1.1582–1.1648 range, touching the session high shortly before the New York open before easing back toward 1.1612.
Eurozone retail sales disappointed, falling 0.1% m/m in January compared with expectations for a 3.0% increase. ECB Governor François Villeroy said the Middle East conflict does not justify higher interest rates at this stage, noting that policy decisions will continue to be evaluated meeting by meeting. He added that a prolonged war could eventually create inflation pressures. Similar views were expressed by Governor Olli Rehn and Bundesbank President Joachim Nagel.
GBPUSD inched higher in 1.3306–1.3387 range. Sterling remained supported by higher UK gilt yields, which climbed toward 4.4%. At the same time, expectations that the Bank of England will cut rates this month have been pared back, which has provided additional support for the pound.
USDJPY moved cautiously in a 156.45–157.38 range and is holding near the top of that band. The pair continues to draw support from firmer US Treasury yields and concerns that higher oil prices could weigh on global economic growth.
AUDUSD traded in a 0.7011–0.7090 range and is currently near the midpoint. The currency is still consolidating earlier losses triggered by US dollar safe-haven demand. Sentiment was also dented by Australia’s trade report, which showed the surplus narrowing to AUD 2.6 billion from AUD 3.37 billion previously.
Todays US data includes US weekly jobless claims and the monthly Challenger Job Cuts report.
