January 25th Morning Update

The US$ stronger, oil prices and equity markets are weaker and US yields are higher. The dollar edged higher and within striking distance of its two-week peak, as investors bought safe-haven currencies amid tensions between Russia and the West over Ukraine while awaiting the outcome of the Federal Reserve’s policy meeting. In other news. North Korea fired what appear to be two cruise missiles from an inland area into the sea. Canada’s foreign affairs department hit with cyberattack. Covid.  Americans who requested their free Covid-19 at-home tests will begin receiving them. The first free N95 masks have begun arriving at US pharmacies. About 40% of the US is “up to date” on Covid-19 vaccination. In currency markets.  The safe-haven yen gained 0.3% versus the euro EURJPY and 0.1% against the dollar JPY, remaining within striking distance of its one-month highs. China’s yuan hovers at 3-1/2-yr high. Australian and New Zealand dollars were on the defensive as world stock markets extended their slide and geopolitical tensions. In surprise move, Singapore tightens monetary policy on inflation risks

USD/CAD grinds higher amid steady oil, sour sentiment. The Loonie pair struggles to find a balance between the risk-off mood and hawkish headlines for Canada’s key export item, WTI crude oil. US consumer confidence and oil inventory data will be the focus today. Support rises to 1.2563 while resistance resets to 1.2710.

German IFO Business Climate unexpectedly improves to 95.7 in January. Following the release Economist Klaus Wohlrabe said that “there is a slight easing of supply shortages in the industry.” Support adjusts to 1.1263, while resistance sets at 1.1375.

EUR/GBP hits a three-week high as risk-off market tone weighs on sterling. EURGBP remains in an .8300-.8400 range. Support holds .8280 (1.2077) while resistance remains at .8400 (1.1905)

Sterling steadied near a three-week low versus the U.S. dollar as investors remained cautious on risk assets amid growing tensions in Ukraine and bets the Federal Reserve will hike rates. Police investigating ‘number of events’ held in Downing Street during Covid restrictions. Support lowers to 1.3430 while resistance remains at 1.3555.