February 16, 2022
USD/CAD: The Canadian dollar was little changed against the U.S. dollar on Tuesday as investors weighed signs of easing tension in Ukraine and looked ahead to key Canadian inflation data. Domestic data showed that home prices jumped 4.9% in January from December to notch a fresh record, as demand continued to rise even as new listings plunged amid cold and snowy weather. Canada’s inflation report for January, due on Wednesday, could offer clues on the outlook for Bank of Canada interest rate hikes. Money markets expect the central bank to tighten next month for the first time since October 2018. Immediate support is seen at 1.27. A breakout below could take the pair towards 1.2640.
EUR/USD: The euro rose on Tuesday as investors absorbed the latest news on the Russia-Ukraine standoff. Investors also assessed data showing U.S. producer prices increased by the most in eight months in January. Last week’s report shows a strong rise in consumer prices in January, with the annual inflation rate posting its largest increase in 40 years. The U.S. dollar index was last down 0.3%, while the euro was up 0.5% against the dollar. Demand for risk may well support further growth in the European currency. Immediate resistance is located at 1.1370. A breakout to the upside can trigger growth towards 1.1450.
GBP/USD: Sterling strengthened against the dollar on Tuesday after reports that Russia was returning some troops near Ukraine to their bases dented demand for safe-haven assets. Data showed that the total number of people working in Britain shrank in the last three months of 2021, while workers’ earnings fell when adjusted for inflation. Today, the pound may be supported by data on inflation, the growth of which will increase the likelihood of another rate hike by the Bank of England. Immediate resistance can be seen at 1.3570. A breakout to the upside can trigger growth towards 1.3650.