Thursday February 22nd, 2024

The USD moves lower, equities and oil rallies while US treasury yields are hedging lower. The dollar edges lower as traders awaits a slew of business activity surveys to gauge the health of major economies. Purchasing Managers' Index (PMI) figures across the U.S., the UK and the euro zone will be released later clarity on their respective manufacturing and service sectors.

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In other news.? Iran has provided Russia with a large number of powerful surface-to-surface ballistic missiles. Israeli bombs on Rafah in what residents called one of their worst nights yet, this was happening as the Hamas chief was in Cairo for talks Gazans hope could bring a truce in time to head off a full-blown assault on the city.

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In currency news.?Gallagher Chairman of the House select committee on China is leading a bipartisan in Taipei where he said that Taiwan would have America’s support no matter who wins the coming U.S. elections. Japanese stocks raced to a new record high; breaking levels last seen in 1989. The CNY and JPY are flat, MYR is up 0.40%, TWD is down 0.11%, The AUD and NZD are both up 0.47 and 0.37% respectively. The trading currencies, MXN and ZAR trade lower 0.05% and 0.25% respectively.

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In commodity markets.?Oil rises for second day on improving signs of US refinery demand. Oil prices are up 0.42%, Nat Gas is down 2.0%, All metals are hedging higher with Gold up 0.21%, Silver up 0.86% and Copper 0.86%. Agricultural commodities are mixed this morning Wheat trading 0.82% lower and soybean up 0.13%.

In the last few trading sessions, we have seen some sharp move higher in the USD/CAD after the release of US and CDN economic data. However, once digested the USD/CAD seems to return to its original level. We are approaching the US 0.75 area (1.3333) where the market seems to find support. Canadian retail sales are set to be released Thursday.

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The EUR/CAD continues to hold on to most of last Friday’s gain and seems to have found an area of support around the 1.4600 area.

The EUR/USD pair extends its winning streak for the seventh consecutive day despite the market anticipating a delay in the lowering of interest rates by the FED. Eurozone and German Purchasing Managers Index (PMI) are to be released later this morning.

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GBP/EUR is trading lower this morning. ?BoE’S Dhingra suggested that delaying interest rate cuts could lead to increased living costs and potentially result in a harsh economic downturn.

The GBP/USD starts on a stronger note as investors await the PMI report. The manufacturing PMI figure is expected to improve to 47.5 in February from 47.0 in January, while the Services PMI figure is projected to drop to 54.1 in January versus 54.3% prior.