On Monday, the Canadian dollar gained momentum against the USD, sending the USD/CAD pair into fresh lows around the 1.4080 handle. CAD picked up the pace in spite the fact that Canadian Housing Starts came out under expectations at a seasonally adjusted value of 173K YoY (year-on-year) in December versus a forecast of 213K and 212K (revised) in November. The USD/CAD closed Monday’s session by regaining the lost pips and posting fresh 13-year highs in the New York session, as a direct consequence of the new multi-year lows in oil price.
[Tweet “Dennis Lockhart: “In my personal opinion about USA’s growth rate in 2016: between 2% and 2.5%” “]
Also in the US, Dennis Lockhart (Atlanta Fed President) stated ion Monday that inflation will be the economic indicator which will dictate Fed’s rate hikes in the near future, the target being a 2% inflation with strong evidence of self-sustain. He also added his personal opinion about USA’s growth rate in 2016: between 2% and 2.5%, with a possible acceleration if oil improves and global conditions are favorable. About the future rate hikes, Lockhart expects an increase in 2016 – thoroughly documented and justified by the economic component, admitting that there isn’t a predetermined schedule or path in the policy, decisions being data-dependent.
On Tuesday, the British pound lost a significant amount of pips on behalf of the USD, sending the major under the support line from 1.4500. The pair intensified its downward momentum due to weak November data for UK’s industrial sector. According to fresh information, Industrial Production has contracted by 0.7% mom (month-on-month) being expected a stagnation, the annual pace sitting at +0.9%. Also, the Manufacturing Production went down with 0.4% mom, down with 1.2% over the course of the past 12 months.
GBP/USD’s weakness extended beyond the European session, going under 1.4400 in the American session for the first time since June 2010 and falling to 5 years and a half low at 1.4378, at the moment of writing trading at 1.4390, with a 1.03% daily loss recorded.
Black gold prices continued their undisturbed downward path on Tuesday, US’s benchmark, the WTI (West Texas Intermediate) barrel, trading briefly below the $30.00 handle for the first time since December 2003. WTI February future of the NYME (New York Mercantile Exchange) traded 4% lower at $29.93.In retrospective, WTI oil prices fell in 2015 just under 20%. The bullish tone in the dollar, the global economic concerns (with the Chinese economy in the spotlight) and the global supply glut are the most important factors which keep pressure over oil prices nowadays.
