Morning brief for February 17
2/17/2017
Market participants had a peeve on the US dollar overnight after it weakened in the currency space despite the upbeat economic release. The greenback was softer mainly because of the US Treasury yields came off their recent highs. USD/JPY dropped to 113.00 after the pair almost approached the 115.00 threshold. Earlier this morning the USD managed to gather its momentum having edged to 113.40 level. If USD/JPY manages to reclaim its positions at around 114.60, it will be a signal of a considerable weakness of the yen.
Some spicy expressions from Fed Vice Chair Stanley Fischer
He refused to unlock the Fed’s secrets about the number of hikes this year but said that the observable activity in the labor market and heightened inflation rates are consistent with the Fed’s projections. Stanley Fischer put an emphasis on the gradual rate increase, keeping hopes of a near-term hike alive, especially if next month’s payrolls data is strong.
The euro hiked to 1.0680 overnight against USD but failed to consolidate its positions there having slipped some points in the early hour of the Asian session. This session is poised to be subdued since today’s economic calendar is very light.
GBP/USD was a winner earlier this morning having risen circa 1.2510. A breakout of the resistance at 1.2520 (near the 100MA on the H4 timeframe) may push the quotes higher towards the resistance at 1.2710. The Sterling focus will be the release of the January retail sales report (11:30 MT time). After a disappointing December data, the market braced up for OK figures for January. If the release is in line with market’s expectation, the pound will gain a modest support.
Aussie rallied to fresh highs at 0.7730 overnight on the upbeat Australian labor market report but failed to stay in that area for a long time closing the day in red around 0.7685. In the Asian session, AUS/USD managed to pare its earlier losses having advanced to 0.7710 level. A further upsurge is a bit problematic. We would be waiting for a correction as the pair approaches 0.7770 level (September 2016 high).
USD/CAD went lower on the session. The pair might continue moving sideways in the narrow range of 1.3050 – 1.3080 levels trying to define its further direction. Today’s focus will be on the Canadian foreign securities purchases ( coming at 15:30 MT time). Brent oil futures built some gains having risen to $55.70 in the past sessions on the positive sentiments over reports that OPEC members may consider extending the timing of their output-reduction agreement. Keep an eye on the weekly US Baker-Hughes oil rig count numbers coming tonight. In the absence of the significant releases, it may become a real market trigger for oil prices and for USD/CAD currency pair.
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