Home Daily Commentaries Cold weather lifts oil demand

Cold weather lifts oil demand

Daily Currency Update

USD - United States DollarDemand for the US dollar was mixed in early morning trading today. EURUSD was down about a tenth of a percent. GBPUSD was up about a tenth of a percent while playing nearing 1.40. AUDUSD was down a fifth of a percent and USDCAD was up over a third of one percent. There’s light economic news this morning to make substantial shifts as global equity markets and commodity prices continued to move upward.Oil prices have reached their highest level in over a year. WTI crude broke through the $60 a barrel and Brent crude hit $63.75. Higher prices are attributed to the cold spell rolling through most of the US.

Key Movers

Great British pound continued to rally yesterday after Prime Minister Boris Johnson announced that the UK would lead a cautious but irreversible path out of the most recent COVID-19 lockdown measures. In just over two months, the UK has vaccinated 15 million residents or nearly 25% of its population. GBP benefited from weakness in the USD, breaking the $1.39 handle and tempting to test the psychological resistance level of $1.40. GBPUSD gained 0.5% yesterday and GBP gained 0.35% against the euro.The Australian dollar maintained a narrow trading band through trade on Monday, unable to break resistance at 0.7790/0.78 US cents. Limited news flow and an absence of headline data meant moves across currency markets were largely muted as markets essentially tread water, weighing near term pandemic lead uncertainty and soft data against longer term recovery expectations. The AUD bounced between 0.776 and 0.7790 for much of the day as investors sold into rallies approaching 0.78, reluctant to extend beyond this key resistance handle. We expect the AUD will remain range bound in the absence of a clear catalyst driving risk on gains.

Expected Ranges

  • EUR/USD: 1.21 - 1.216 ▲
  • GBP/USD: 1.387 - 1.395 ▼
  • AUD/USD: 0.774 - 0.780 ▲
  • USD/CAD: 1.261 - 1.270 ▲