By Deepta Bolaky
The US markets were closed on Monday for Martin Luther King Jr day. In the European markets, major equity indices closed in the red as Brexit-related headlines dampened risk sentiment.
The comments from the UK Chancellor, Sajid Javid revived fears that on the future relationship between the European Union and the UK:
“We will not be in the single market and we will not be in the customs union,” said Mr Javid.”
In the FX market, the US dollar was generally stronger than the other major currencies. Amid a thin economic calendar and a holiday in the US, the price action in the FX was limited.
The Canadian dollar was the best performer despite a stronger US dollar. The USDCAD traded in the 1.30 level and found resistance around 1.3070. The BoC’s interest rate decision this Wednesday could challenge this resistance level.
The central bank is widely expected to leave its interest rate unchanged at 1.75% at Wednesday’s meeting. Amid the global backdrop, the BoC has remained resilient compared to its global peers. However, investors will be keen to monitor whether there is a shift in tone following the warnings signs seen towards the end of last year due to the moderation in the consumption, investment and employment sector.
USDCAD (Hourly Chart)
The renewed Brexit fears, poor economic data, and heightened expectations of a rate cut are keeping the bulls on the sides. GBPUSD pair briefly dropped below 1.29 level before recovering just above the 1.30 level.
GBPUSD (Hourly Chart)
Source: GO MT4
In the oil market, WTI and Brent Crude opened with a bullish gap on Monday boosted by prospects of supply disruptions following the tensions in Libya and Iraq. However, during the course of the day, oil prices trimmed initial gains.
As of writing, WTI and Brent Crude is trading in the vicinity of $58 and $64 respectively.
USOUSD and UKOUSD (Daily Chart)
Source: GO MT4
Gold is marginally higher despite some geopolitical tensions. A stronger dollar has underpinned any further upward movement of the yellow metal. As of writing, the XAUUSD pair is currently trading at $1,560.
XAUUSD (Hourly Chart)
Source: GO MT4
World Economic Forum (Davos)
EcoFin Meeting and ZEW Survey- Economic Sentiment (Eurozone)
BoJ Monetary Policy Statement, Interest Rate Decision, Outlook Report and Press Conference (BoJ)
Claimant Count Change, ILO Unemployment Rate, and Average Earnings (UK)
ZEW Survey – Current Situation and Economic Sentiment (Germany)
GDT Price Index (New Zealand)
|Wednesday, 22nd January 2020
Indicative Index Dividends
Dividends are in Points
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