By Kymberly Martin
Most currencies pushed higher against the USD last evening, before succumbing to a rebound in the USD in the early hours of this morning.
Overall, the CAD and JPY have been the strongest currencies since the start of the week while the GBP has been the weakest.
The rally in the US equity market ran out of steam overnight. The S&P500 is down 0.4%, though still up more than 6% since early-November. Interest rates sensitive sectors, such as Utilities, outperformed as US bond yields declined a bit further from recent highs.
The global oil price managed a bit of a rebound (WTI +3%) overnight. The prospects for a supply cut deal still appear tenuous ahead of Wednesday’s OPEC meeting, but have been helped by comments from Iraq’s oil minister. He was quoted overnight as saying he was “optimistic” a deal will be reached at OPEC’s summit.
The rebound in the oil price has no doubt supported the performance of the ‘oil-linked’ CAD overnight. The CAD has rebounded 0.8% against the USD since the start of the week. The USD/CAD now trade at 1.3400.
The downward momentum in the JPY appears to have been curtailed for now. From last week’s highs of 113.90 the USD/JPY now trades at 112.40, having touched intra-night lows of 111.50.
The AUD/USD and NZD/USD have both gained since the start of the week, alongside a rise in broad global commodity indices. The CRB commodity index sits 1.3% above Friday’s closing level, assisted by the rebound in the oil price. The AUD/USD currently trades above 0.7470, having rebounded 2.5% over the past week.
The recent strength in the NZD/JPY has run out of momentum as the JPY gained the upper-hand overnight. There appears to be resistance to the cross breaking above the 80.00 level. That said, the cross found support at 78.90 early yesterday afternoon and has subsequently traded back up to 79.40.
There are no domestic data releases scheduled for today. Tonight there is a smattering of US data due, including the second reading of Q3 GDP. The Fed’s Powell and Dudley are also scheduled to speak.
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