Daily Market Analysis from ForexMart

USD/CAD. January 24, 2020 – Looney fell after a meeting of the Bank of Canada

Yesterday, the USD/CAD pair managed to grow to the level of 1.3170, but today the Canadian currency is showing some strengthening to 1.3130. The loony weakened after the announcement of the results of the Bank of Canada meeting. The regulator decided to keep the interest rate unchanged at 1.75%, noting that a decrease in the future is possible if the pace of economic recovery continues to slow down.

In addition, the Central Bank lowered its forecast for economic growth in the IV quarter to 0.3% against 1.3%, which was forecasted in October.

Additional pressure on the «Canadian» was provided by data on the consumer price index, according to which inflation in Canada in December remained unchanged at 2.2%. The situation in the oil market also does not give optimism. Oil quotes also continue to decline amid the threat of the spread of coronavirus from China around the world.

EUR/USD. January 27, 2020 – Euro declines to 1.10

The sentiments on global sites remains negative due to the further spread of coronavirus in China. To date, nearly 3,000 cases have been reported in China, and 80 cases have already been fatal. As a result, the pair EUR/USD fell to the level of 1.1015. Pressure on the euro had Friday's data on business PMI in the eurozone. Despite the fact that the indicator turned out to be better than expected (47.8 vs 46.8), it still remains below 50 points, which indicates a further reduction in business activity in the EU manufacturing sector.

This week, attention should be paid to the meeting of the US Federal Reserve, which will be held on Wednesday (January 29). Analysts predict that the rate will remain unchanged. At the same time, the regulator can indicate its policy on injecting dollar liquidity into the system.

If the Fed expresses its readiness to continue purchasing treasury bills, this could support risky assets and limit negative market sentiment. Today, during the day, the euro will continue to fluctuate near the level of 1.10.

GBP/USD. January 28, 2020 – Sterling drops to 1.30

The pound continues to decline actively, having approached the level of 1.30. This week is very important for the British currency – on Thursday a meeting of the Bank of England will take place, at which the regulator can soften its monetary policy.

In addition, January 31 is the date of Brexit, when the UK will officially cease to be part of the European Union. This event could lead to increased market volatility.

Additional pressure on the sterling is provided by the general strengthening of the US dollar, which has received support, as investors tend to invest in less risky assets amid the spread of concerns about the Chinese coronavirus.

EUR/USD. January 29, 2020 – Euro remains in the area of ​​local lows 1.10

The sentiment in global markets is gradually recovering amid a decrease in investor anxiety about the further spread of the Chinese coronavirus. Experts note that the spread of infection outside of China is extremely slow, which returns the interest to risky assets.

However, the EUR/USD pair continues to trade at the low of November nearby 1.1000. Today we should pay attention to the meeting of the US Federal Reserve. Markets expect Fed to keep rates unchanged at the level of 1,75%. At the same time, the US regulator can confirm its readiness to continue purchasing treasury bills to maintain dollar liquidity in the system. And this can support the entire block of risky assets and put some pressure on the dollar in the evening.

Brent/USD. January 30, 2020

Oil quotes again began to decline, moving in line with all risky assets. The current Brent quote is $57.60 per barrel. The asset again was under pressure of increased concerns about the further spread of coronavirus from China. Information that the current epidemic could cause global damage to the Chinese economy in the I quarter of 2020 also puts pressure on Brent. As a result, concerns about the demand for raw materials dominate the oil market.

Additional pressure on the oil rate was provided by data from the US Department of Energy, refuting preliminary data from the API. The agency reported an increase in crude oil reserves in the country of 3.5 million barrels, while a report from the API reflected a decrease in reserves of more than 4 million barrels. Today, oil will continue to decline under the pressure of a negative external background.

EUR/USD. January 31,2020 – Euro in the range of 1.10-1.1040

The EUR/USD pair continues to trade in the range 1,1000-1,1040, reacting to news regarding the further spread of coronavirus outside of China. Representatives of the World Health Organization (WHO) said yesterday that there is no need to limit travel and trade with China, which has slightly increased the demand for risky assets.

Today, attention should be paid to inflation data in the eurozone. Eurostat said in January consumer prices fell 1.0% month-on-month, and rose 1,4% year-on-year. Fresh statistics may give a slight support to the euro today.

EUR/USD. February 03, 2020 – The dollar is moving towards 1.1050

Global market sentiment is again taking on a negative connotation due to news about the further spread of the Chinese virus.The number of infections and deaths continues to grow. In an attempt to limit the negative impact of recent events on the country's economy, the People’s Bank of China provided 1.2 billion yuan ($171 billion) in 7 and 14-day repurchase transactions, as well as reduced rates on these instruments. Such actions should provide some support for risky assets.

Quotes of the EUR/USD pair are falling to the level of 1.1050 after rising to almost 1.11. Today, you should pay attention to the statistics block from Europe and the USA, where countries will present data on business activity. The indicator in the eurozone should grow from 46.3 to 47.8, and in the UK – from 47.5 to 49.8 points. In the States, the index should decline from 52.4 to 51.7. At the same time, the dollar may be supported by the publication of the ISM production index – an increase from 47.2 to 48.5 points is expected.

During the day, the dollar will continue to strengthen to the level of 1.1050.

GBP/USD. February 04, 2020 – Sterling collapsed to 1.30 area

British sterling crashed into the 1.3000 area yesterday after market participants realized how difficult the period of trade negotiations between Britain and the EU would be. British Prime Minister Boris Johnson in his speech said that he would rather agree with the tariffs than with the jurisdiction of the European Court, which once again heated the degree of relations between the parties.

Today, you should pay attention to data on business activity in the services sector and the construction sector in Britain. The country's construction sector is going through hard times due to Brexit, since the EU will not allow London to remain the financial capital of Europe, which significantly reduces the demand for luxury housing and offices. Nevertheless, analysts expect the indicator to rise from 44.4 to 46.2, which may support the pound.

Also, investor interest may be attracted by data on the rate of decline in producer prices: the indicator may slow down from -1.4% to -0.5%.

EUR/USD. February 05, 2020 – The pair is steadily declining to 1.10

The trading range of the pair was limited by the levels of 1.10-1.11. There is still a moderate appetite for risky assets on global sites, despite the emergence of new reports about the Chinese coronavirus. Yesterday, the number of cases increased by more than 3 thousand people, and the number of deaths approached 500.

The pair EUR/USD is falling on Wednesday to the level of 1.10. The dollar was supported by the comments of US economic adviser L. Kudlow, who noted that China’s trade obligations could be extended over time due to the negative consequences of the outbreak of coronavirus. You should also pay attention to data on business activity in the US services sector in the evening. It is expected that the ISM index in the non-manufacturing sector will remain at a comfortable level near the mark of 55. These statistics will allow the dollar to come close to the level of 1.10.

EUR/USD. February 06, 2020 – Dollar continues to grow

The euro halted its fall in the 1.1000 area after China announced a decision to halve import duties on US goods worth about $75 billion to improve trade relations. At the same time, markets ignore the topic of the further spread of the Chinese virus, despite the continuing increase in cases of the disease.

Yesterday, the dollar showed strong growth after the release of data on business activity in the service sector. ISM's Procurement Managers Index for the US non-manufacturing sector rose from 54.9 to 55.5, while the number of jobs created in the private sector of the US economy increased by 291 thousand in January against expectations for growth of 157 thousand.

Today we expect the dollar to grow to the 1.0980 area.