– WTI oil hits $130.00/barrel
– Inflammatory Russia/Ukraine headlines fuel risk aversion
– US dollar opens mixed, EUR plummets
USDCAD Snapshot: open 1.2722-26, overnight range-1.2688-1.2755, close 1.2729, WTI open $122.71, Gold open $2,001.59
The Canadian dollar drifted aimlessly overnight despite soaring oil prices and renewed risk-aversion trading in other G-10 currencies.
The US is considering a bi-partisan bill to ban imports of Russian oil and there is talk that the rest of the Western nations including the European Union may follow suit. Politicians are outraged by reports the Russian military is targeting civilians.
West Texas Intermediate spiked to $130.00/barrel in Asia after closing in NY at 114.92/b on Friday but prices have since retreated in NY, mainly due to profit-taking.
The ban is far from a sure thing as the Biden administration is concerned that such a move would exacerbate US inflation pressures. CPI is expected to rise to 7.8% in February. The White House is opening negotiations with Venezuela in hopes that exports from that country could help alleviate the loss of Russian supply.
Alberta Energy Minister Sonya Savage is gob smacked by the news. She can’t believe that the US considers oil from a country that supports human trafficking, terrorism, and drug trafficking is a better source than Canadian oil.
Asian equity indexes plunged. Japan’s Nikkei 225 closed down 2.94% and Australia’s ASX 200 lost 1.02%. European bourses are deep in the red, but off their worst levels, while S&P 500 futures are clawing back overnight losses. WTI oil has retreated from its $130.00 overnight peak to $121.70, and gold prices dropped from $2,002.51 in Asia, to $1,984.50 in early NY trading. The US 10-year yield climbed from 1.671% in Asia to 1.777% in NY. The US dollar index (USDX jumped to within spitting distance of 100.00, reaching 99.43 before falling back to 98.91.
EURUSD dropped from 1.0953 to 1.0807 before retracing to 1.0873 in NY. The single currency is suffering from its proximity to the war zone and by concerns the hostilities have handcuffed ECB ‘s drift towards monetary policy normalization. German Factory orders were higher than expected.
GBPUSD is just above the middle of its 1.3143-1.3244 overnight range. GBPUSD, like the rest of the G-10 majors is weighed down by fears a major global economic slowdown due to higher oil prices and contagion from Russian sanctions.
USDJPY traded with a mildly bullish bias in a 114.82-115.21 range, underpinned by firming Treasury yields.
AUDUSD and NZDUSD outperformed due to sharply higher commodity prices.
There are not any US or Canadian economic reports today.