Friday January 10th, 2020

Markets are closing the week on a calmer note as tensions between US & Iran are easing. Focus remains on the cause of crash the Ukrainian jet leaving the potential of further ME tensions. Safe-haven currencies & commodities remain under pressure allowing the US$ to have its best weekly gain in weeks. The market is focusing on the signing of the phase one trade deal on the 15th January with China, which should also boost trade-exposed currencies. Intraday the release of the US Non-Farm payroll report for December is the primary concern for US$ direction today.

Oil retraced all of its gains for the week due to easing middle east tensions and rising US inventories. Expect oil to find a base around current levels, with the signing of the phase one Sino/US agreement providing support to the commodity. C$ remained below the key 1.3115 level yesterday finding support as a trade-exposed currency. Canadian jobs data will be key today, a disappointing number could see the key 1.3115 breached for a rebound towards 1.3180. Bias remains longer term C$ bullish under the current geopolitical environment.

The pressure on Euro continues as it breached 1.1100 vs US$ despite encouraging German data. 1.1040 level remains a key support for Euro vs US$ which should hold intraday. Ongoing Brexit concerns and a generally stronger US$ is keeping the Euro under pressure. US non-farm payroll data will be watched closely and will provide intraday direction to Euro.

The UK parliament approved the Brexit withdrawal bill yesterday and the UK is set to leave the EU on January 31st. The concerned comments from the EU chief commissioner alongside BOE governors dovish comments saw GBP come under renewed selling pressure. GBP has managed to hold above the psychological 1.3000 level vs US$ despite the negative comments.