Key overnight events:
- Oil prices recovered sharply last Friday as crude oil futures expiring in March soared above $32/bbl. The oil rally continued today and reached a high of 32.64/bbl this morning, marking an 18.4% retracement from the low last week.
- The S&P 500 gained 2% at Friday’s close, following strong 2-3% rallies across Europe and Asia.
- Speaking to journalists in Davos, BoJ governor Kuroda provided no indication that the BoJ meeting on 29th Jan will offer more easing. He also added that China should use capital controls to defend the yuan instead of burning through its reserves.
- Spot 1.4271
- USDSGD continues to trade near its lowest levels since 7th Jan. It traded down to a low of 1.4254 on Friday.
- CPI figures due for release today are expected to show deflation slowed last month. Consumer prices are expected to decline 0.7% year-on-year in December, after a 0.8% drop in November.
- Spot 0.7013
- AUDUSD continues hold above the 0.7000 handle, as bulls look to retest the resistance level of 0.7050.
- With continued improvement in risk sentiment, a potential rise to the 100-day moving average of 0.7150 is possible.
- Spot 1.4127
- USDCAD extended its decline to a low of 1.4116 on Friday, as the Canadian dollar continues to strengthen in tandem with oil’s recovery.
- Major resistances below for USDCAD include the 1.4000 psychological level, as well as the 50-day moving average at 1.3810.
- Spot 6.6081
- USDCNH declined for the first time in 5 days after China stepped up its verbal defence of its currency to ward off speculators betting on depreciation. According to a commentary on Saturday by Xinhua News Agency, those entering short positions in the yuan are expected “to suffer huge losses”.
- USDCNH declined by 0.19% to an intraday low of 6.6032 this morning.
- Spot 8.7270
- Norway’s Prime Minister Erna Solberg said that the krone is now weak enough to shield most of its economy from the ongoing oil crisis, and that a weaker krone is not needed.
- USDNOK fell on Friday to a low of 8.7171, its lowest level in 2016, spurred by the broad recovery in oil prices.
- Next support below lies at 8.6000.