The USD strengthen, oil prices down, while equities are mixed, and US yields are flat. After 3 days of losses, the USD has stabilized on FED’S Waller comments of holding rates on hold until it’s clear that inflation is fading. He also acknowledged that there is some degree of uncertainties on Trump’s administrations policies but reiterated that the tariffs would only modestly raises prices in a non-persistent manner.
News Headlines. The US and Russia are holding talks in Saudi Arabia about the war in Ukraine - it's the first in-person meeting since Moscow's full-scale invasion three years ago, Neither Ukraine nor Europe representative were invited. These talks are meant to see if Russia is serious about ending the war. Zelensky has repeatedly said he won't recognise a peace deal negotiated without Ukraine. Speaking after a hastily convened meeting with European leaders in Paris, the UK prime minister repeated that he would consider deploying UK troops to Ukraine in the event of a lasting peace agreement. However, a US security guarantee was the only way to effectively deter Russia. North Korea criticized the United States and its allies for pursuing the "absurd and outdated" goal of denuclearization, saying that Pyongyang would stick to leader Kim Jong Un's goal of building up its nuclear forces.
In currency markets. The trading remains choppy as investors' search for the next catalyst continues. The European economic calendar will feature February ZEW Survey - Economic Sentiment for Germany and the Eurozone. Later in the day, January Consumer Price Index (CPI) data from Canada will be watched closely by market participants. Australia's central bank cut rates for the first time in more than four years on Tuesday but warned it was too early to declare victory over inflation and was cautious about the prospects of further easing. The USD gains against most Asian currencies, rising against the JPY 0.24%, CNY 0.2%, MYR 0.38%. AUD and NZD are moving in opposite direction with the AUD strengthening 0.4% against the greenback and NZD down 0.42%. There has been little movement in the trading currencies against the USD with the MXN up 0.03% and ZAR down 0.05%.
In commodity markets. Oil prices remain volatile trading lower by 0.27%. Natural Gas prices rallied 0.70%. Gold prices gained by 0.55%. Silver & Copper prices firmed by 0.23% and 0.67% respectively. Wheat prices (-0.90%) retrace from a 4-month high while soybean edges lower (-0.25%) nearing a 1-month low.
Current level USD Index 106.93 Up 0.34%
USD/CAD trades near the 1.4200 level as the market awaits CPI inflation figures later today. Tariffs on Canadian goods and possible retaliation from the Canadian government remains the focus for traders. Friday’s announcement that tariffs on automobile will begin as soon as April 2nd are adding to the uncertainties. The one silver lining for the C$ is the rising oil prices.
Current level USD/CAD 1.4185 Flat
The EUR/CAD pair is under increased selling pressure as market sentiment turns cautious toward the euro. Investors remain wary ahead of Germany’s upcoming elections and U.S.-Russia negotiations in Saudi Arabia, which could influence geopolitical stability, particularly regarding the Ukraine conflict. Meanwhile, the Canadian dollar is finding support from rising oil prices, which has further strengthened its position against the euro.
Current level EUR/CAD 1.4839 Down 0.23%
EUR/USD falls to near 1.0450 as the US Dollar rebounds after Fed officials guided that there is no need to make policy adjustments at least for now. The Greenback discovers buying interest as investors weigh in expectations that the FED will keep interest rates in the current range of 4.25%-4.50% for a longer period.
Current level EUR/USD 1.0463 Down 0.20%
GBP/EUR Pound rallied against the Euro after stronger-than-expected UK wage growth triggered fresh doubts about whether the Bank of England would be able to cut interest rates more aggressively. The currency pair hit a 6-weeks high (1.2060)
Current level GBP/EUR 1.2043 (0.8303) Up 0.05%
GBP/USD a strong set of employment figures took pressure off the Bank of England to cut interest rates next month, boosting the British Pound in the process. The UK unemployment unexpectedly held steady at 4.4% in December, which is below the consensus expectation and the Bank of England's forecast of 4.5%.
Current level GBP/USD 1.2602 Down 0.15%
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