November 23rd, 2021

The US$ and oil are lower, equity markets are mixed and US yields are up. The US index reached a 16-month high after Fed Powell was nominated to a second term as Feb chairman. Market anticipate that Powell’s confirmation could lead to a tougher stance on inflation. In other news. U.S. set to unveil emergency oil release in bid to fight high prices. A “swap” from the U.S. Strategic Petroleum Reserve (SPR) will be announced on Tuesday in a move coordinated with several countries. COVID, U.S. advises against travel to Germany and Denmark. Pfizer vaccine trial data shows long-term efficacy in adolescents. In currency markets, The Reserve Bank of New Zealand is expected to deliver a 25-basis point rate hike on Wednesday. U.S. warship again transits sensitive Taiwan Strait.

The C$ remains under pressure as it deals with softer oil prices and rising US rates. The potential release of the US strategic petroleum reserve could limit any gains for the C$. Support moves to 1.2677, while resistance level rises to at 1.2755.

The Eurozone manufacturing sector activity improved more than expected in the reported month pushing the Euro higher. ECB’s Knot: Sees rate lift-off sometime after 2022. Support moves to 1.1214, while resistance resets to 1.1316. (Note that the Jun2 2020 low is 1.1162 – well within reach given market direction)

EURGBP bounced off a 21-month low after the Eurozone PMI. Support resets to .8380 (1.1933) while resistance lowers to .8480 (1.1792)

GBP/USD fell below 1.3400 amid broad-based dollar strength and seems to be struggling to stage a recovery. Brexit woes are also a contributing factor in keeping the pressure on the GBP. BoE’s Haskel: Rate will have to rise if labor market stays tight. Support drops to 1.3338 while resistance resets to 1.3437.