Markets had little reaction to the weak US ADP jobs report for January - global stocks are on track for their best 4-day rally since November 2020. The DXY continued its slide this week amid the risk-on market mood. Eurozone inflation is on the rise – January’s CPI rose 5.1%, higher than 4.4% expected. The European Central Bank meets tomorrow, and no hike is expected. The Bank of England also meets tomorrow and a hike of 25 bps is expected. Crude oil prices jumped after OPEC announced an increase in oil demand, which lifted commodity-linked currencies.
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February 2, 2022
EUR/USD 1.1305 GBP/USD 1.3558 USD/CAD 1.2694 AUD/USD 0.7128 USD/JPY 114.27 USD/CNH 6.3635 USD/ILS 3.1680 USD/MXN 20.5700 USD/CHF 0.9196 USD/INR 74.8375 USD/BRL 5.3110 USD/SGD 1.3482 USD/DKK 6.5810 USD/SEK 9.2060 USD/NOK 8.7985
The dollar continues its slide this week after US firms cut 301k in jobs in January causing the DXY to fall 0.30%. Expectations were for gains of 180k jobs and the -301k was a large miss. US equities rebound this week with a general risk-on sentiment, 7 of 9 sectors in the S&P are rising.GBP
For the second day in February sterling is up 0.30% vs. the dollar. This is largely due to the ADP miss on the US front. Investors await tomorrow's BoE monetary policy meeting where they are expected to raise borrowing cost by 25 basis points, taking the bank rate to 50 bps.EUR
The EU Consumer Price Index hit a record high of 5.1% YoY in January. This raises the concern of inflation and put pressure on the ECB ahead of its monetary policy meeting tomorrow. The EUR continues its three-day rally in the lower $1.13 range even as the ECB continues to maintain its cautious approach to the rise in inflation.CAD
USD/CAD rates continued to drop for the third successive day. The drop was partially due to the US jobs miss but was also underpinned by the OPEC announcement to increase oil production by 400k barrels a day in March. Oil prices jumped to a seven-year high, which underpinned the commodity-linked loonie.ASIA/PACIFIC
AUD/USD rates continue to climb for the third straight day with intra-day gains of 0.20%. The continued rise of AUD/USD is largely due the US jobs miss for January, and the prevalent USD selling bias.
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