Oil-Related Currencies Perk Up


Jan 26, 2016



It was a good day for the oil-related currencies, led by the CAD, which broke 1.4100 late in the day after what was a very modest recovery in the WTI/Brent. After dipping onto a USD 29.00 handle, oil prices saw the spot rate up at 1.4325, but this did not last long. Comments from Iraq Oil ministers that Saudi Arabia would be flexible on output turned the tide. As global stocks recovered, risk on trade was in full flow. AUD, NZD, GBP and much of EM all posted notable gains, but AUD struggled on the .7000 handle. Cable managed to take out some near term resistance levels to return through 1.4300, but EUR/GBP reluctant to test the .7550 lows as yet.

Not such an exciting day for USD/JPY or EUR/USD though, with the former reluctant to join in on the risk relief, though remains well supported in low-mid 118.00’s with the potential for fresh stimulus measures from the BoJ later this week. EUR/USD is caught in a very tight range in the low 1.0800, but with EUR/CHF pushing through 1.1000 and targeting the post 1.2000 peg-recovery highs, we suspect the SNB may have a hand in this. CNH still out of the limelight, but evidence of early intervention after 6.6200 was swiftly hit.


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