Key overnight events:
- The Fed warned that turbulence in financial markets may pose risks to the US economy. They however opened the door to a change in their outlook for the economy this year, and thus possibly a slower pace of rate hikes which would make a rate increase in March unlikely. Near-term inflation expectations, in addition, was lowered.
- The S&P 500 and Dow Jones Industrial Average indices fell 1.1% and 1.4% respectively as investors ignored the Fed’s dovish tone, choosing instead to focus on negative growth comments.
- Crude oil futures expiring in March rose to its highest level in 2 weeks of $32.84/bbl after a drop in stockpiles at the biggest storage hub in the US overshadowed a rise in nationwide inventories.
- The RBNZ left rates unchanged this morning, and stated that easing may be required over the year in order to boost inflation.
- Spot 1.4319
- USDSGD seems to have established a new range of 1.4250 – 1.4330 over the past 4 days.
- The 100-day moving average of 1.4150 could potentially provide decent near-term support.
- Spot 0.7043
- AUDUSD climbed to 0.7082 last night, its highest since 8th Jan
- Sustained support at the 0.7000 level could push the currency pair up to the 100-day moving average of 0.7150.
- Spot 1.4109
- USDCAD has declined more than 4% from its 1.4690 high last week, to last night’s low of 1.4028.
- It remains well-supported at 1.4000 and looks likely to consolidate further around this level in the near-term.
- GDP figures due tomorrow night are expected to show that the Canadian economy expanded 0.3% month-on-month and 0.2% year-on-year in November last year, an improvement from the prior month’s figures of 0.0% and -0.2% respectively.
- Spot 6.6115
- A strong ceiling at the 6.6200 level looks to have been established over the past few days as USDCNH’s sideways movement continues to be the main theme here.
- Spot 8.6627
- USDNOK continued its trend of making lower lows, hitting a new low of 8.6471, the lowest since 29th Dec last year.
- The krone has been exhibiting renewed strength on the back of various positive statements made by Norway’s finance and prime minister over the past week.