Market News

Oil fell for a third day on Wednesday, dropping nearly 1 percent on concerns about rising U.S. production and another drop in financial markets after U.S. consumer prices rose more than expected.

U.S. consumer prices rose more than expected in January, with a measure of underlying inflation posting its biggest gain in a year, strengthening expectations the Federal Reserve will have to quicken the pace of interest rate increases this year.

JPY was the top currency of the session despite the risk-on vibes. Global bond yields were down, though, and those may have given JPY a boost. Meanwhile, GBP found sellers, even though there weren’t really any apparent catalysts.

The dollar slid to a 15-month low against the yen on Wednesday, while world stock markets found firmer ground ahead of U.S. inflation numbers that could soothe, or inflame, fears of faster interest-rate hikes globally.

G’day, forex mates! Australia will be releasing its latest jobs report tomorrow, which will likely give the Aussie a volatility injection. And if you need to get up to speed on that top-tier event, then it’s time to read up on another edition of my Event Preview.

With not a lot of fresh catalysts to move the markets, Asian session forex traders turned to individual economic reports for direction.

The dollar slid to a 15-month low against the yen on Wednesday, as investors remained on edge ahead of key U.S. inflation numbers later in the day, underscoring fragile risk sentiment following the recent shakeout in equity markets.

Wall Street chalked up its third consecutive day in the green, but this did little to shore up the dollar as traders take on more risk. The Loonie was also in a weak spot while the Japanese yen gave back some of its intraday gains.

Oil prices were flat on Tuesday, bouncing back from an early slide as the dollar fell to a one-week low, which encouraged buying of dollar-denominated crude at session lows.

Trade challenges from U.S. firms will continue to cause turbulence for Canada even if talks to modernize NAFTA are successful, a senior Canadian government official said on Tuesday.

The U.K.’s CPI readings turned out to be better-than-expected and gave GBP a boost. And while USD weakened further, CAD was actually the worst-performing currency of the session, probably because of falling oil prices.

British inflation unexpectedly held close to its highest level in nearly six years in January, highlighting the challenge facing the Bank of England and reinforcing expectations of a rise in interest rates in May.

European shares faltered on Tuesday morning in contrast with Wall Street which bounced back for a second day overnight, and as a flurry of corporate results failed to lift indexes.

Gold rose for a second day on Tuesday as the dollar slipped in the face of a rebound in Asian equity markets, which dampened appetite for the U.S. currency asa safe store of value.

Risk appetite extended its stay in the financial markets, buoying stocks and commodities higher for the Asian session. Strangely enough, the lower-yielding yen managed to rake in some pips while the euro also advanced.

Wall Street was off to a bit of a slow start as there were no major headlines or economic catalysts. Higher-yielders slowly crawled their way back up from last week’s sharp falls while the safe-haven dollar gave up some ground.

President Donald Trump unveiled a long-awaited infrastructure plan on Monday that asks the U.S. Congress to authorize $200 billion over 10 years to stimulate $1.5 trillion in improvements paid for by states, localities and private investors.

Oil rose nearly 2 percent on Monday, recovering some of last week’s steep losses as global equities steadied after their largest one-week slide in two years.

German Chancellor Angela Merkel and the leader of the Social Democrats (SPD) faced further criticism on Monday from within their own parties over a new coalition deal that must still be approved by disgruntled SPD rank-and-file members.

Today’s morning London session was relatively calm, with many pairs contentedly trading sideways in tight ranges. The only exception was the Aussie since it was clearly bid higher across the board.