The Morning Update

The USD strengthen, oil prices rise, while equities move lower, and US yields edge higher. The US Dollar is gaining across the board ahead of the US session. Traders are seeing early comments out of Riyadh not bearing much positive signs. the US dollar strengthened amid safe-haven buying after reports of a likely stall in the Russia-Ukraine peace talks. Meanwhile, Russia took a harder stance regarding the peace deal, raising fears it might not come soon. Continued tensions between the two countries will keep the risk of an escalation alive. The FOMC minutes are expected to be release this afternoon, which should provide insight on the FED’s on inflation, interest rates etc.

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News Headlines. Top U.S. and Russian officials had their most extensive high-level engagement since Moscow sent troops into Ukraine almost three years ago, meeting for four hours. Trump showed little patience for Ukraine’s objections to being excluded from the talks in Saudi Arabia. He said repeatedly that Ukraine’s leaders never should have allowed the conflict to begin, indicating Kyiv should have been willing to make concessions to Russia before it sent troops into Ukraine in 2022. Trump signals support for Russia's demand that Ukraine hold presidential elections. In a news conference, Zelensky says his country is hoping for an "allied position in Europe, in the EU and the US around Ukraine in this unjust war".

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In currency markets. China is expected to leave its benchmark lending rates unchanged on Thursday, as authorities walk a fine line between prioritising financial stability and providing more stimulus at a time when Beijing is facing fresh trade tensions. USD/JPY traded on a softer footing this morning on comments from BoJ’s board member Takata – it is important for BoJ to continue to consider policy adjustments even after last month’s rate hike to avoid excessively high expectations that monetary easing might persist. The USD is mixed against Asian currencies, dropping 0.05% against the JPY, rising CNY 0.9%, MYR (- 0.08%). AUD loses some ground (0.08%) while the NZD gained 0.15%. In the trading currencies the ZAR lost 0.5% against the greenback while the MXN faired better by dropping only 0.04%.

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In commodity markets. Oil prices continue it moves higher gaining nearly 1%.  Natural Gas prices rallied 2.0 %. Gold prices are flat this morning.  Silver & Copper prices are mixed with Silver rising 0.05%% and Copper down 0.05%. Wheat prices is up 0.09% while Soybean rose 0.40%.

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Current level USD Index                107.17            Up 0.11%

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USD/CAD Yesterday’s January CPI figures came in as expected nut the annual inflation rate came in higher than expected. After the inflation report, markets were pricing a 63% chance of a BoC pause in March up from 56% prior to the release.

Current level USD/CAD                   1.4203            Up 0.03%

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The EUR/CAD is moving lower on the back of higher-than-expected Canadian inflation and the renewed threat of tariffs in Europe.  

Current level EUR/CAD                   1.4810            Down 0.14%

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EUR/USD declines to near 1.0420 in Wednesday’s European session as the US Dollar (USD) extends its upside movement on the announcement that Trump’s administration plan to impose 25% tariffs on automobiles, semi-conductors and pharmaceuticals and these would be increase in 2026.

Current level EUR/USD                   1.0428            Down 0.17%

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GBP/EUR edged lower as UK inflation reached its highest level in 10 months. The January’s CPI inflation figures which rose to 3.0% year-on-year, marking a significant uptick from December's 2.5% as well as surpassing market expectations.

Current level GBP/EUR       1.2075 (0.8282)         Down 0.12%

GBP/USD struggles to hold its ground and trades marginally lower on the day despite the higher-than-expected inflation data released earlier today.

Current level GBP/USD                   1.2584          Down 0.23%

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