February 17, 2022
USD/CAD: The Canadian dollar strengthened against the U.S. dollar on Wednesday as oil prices rose and domestic data showed inflation further heating up in January. Canada’s annual inflation rate accelerated in January to a 30-year high of 5.1%, as food and housing costs continued to rise, while the average of the Bank of Canada’s three core measures rose to 3.2%. The price of oil, one of Canada’s major exports, recouped some of Tuesday’s decline, with U.S. crude being up 1.7% at $93.65 a barrel. If market sentiment does not change in the near future, the pair may continue to rise. Immediate resistance can be seen at 1.27. A break to the upside can trigger a rise towards 1.2750.
EUR/USD: The euro held steady on Wednesday on optimism after reports that some Russian forces had moved away from the Ukraine border, but gains were limited by the news of a cyber attack. Statistics also provided support for the euro. Europe’s industrial production growth exceeded expectations in December despite supply chain problems and high costs. Compared to November, production increased by 1.2%. Economists polled by the Wall Street Journal had expected growth of 0.1%. Immediate resistance can be seen at 1.1400. A break to the upside can trigger growth towards 1.1460.
GBP/USD: Sterling strengthened against the U.S. dollar on Wednesday after data showed inflation in Britain at a nearly 30-year high, reinforcing expectations the Bank of England will further hike interest rates. The annual rate of consumer price inflation rose to 5.5% in January, the highest since March 1992, and above expectations from economists for it to hold at December’s 5.4%. Soaring inflation across many global economies has sparked a debate about how fast central banks should rein in stimulus deployed earlier in the COVID-19 pandemic to prop up businesses and consumers. Since December, the BoE has already raised interest rates and can do it again. Immediate resistance can be seen at 1.3580. A breakout above this level can trigger growth towards 1.3650.