February 23, 2022
GBP/USD: Sterling fell to a six-day low against the dollar on Tuesday, with investors being cautious on the British currency amid the Russia-West stand-off over Ukraine. Also weighing on the pound, Bank of England Deputy Governor Dave Ramsden on Tuesday signaled more monetary tightening but said he now sees a modest rate hike over the coming months. The BoE raised interest rates to 0.5% this month from 0.25%, with Ramsden part of a minority who then voted for a bigger increase to 0.75%. The prospect of further monetary tightening will continue to support the pound. Immediate resistance can be seen at 1.3620. A breakout up can trigger growth towards 1.3700.
EUR/USD: The euro rose against the dollar on Tuesday as investors’ focus shifted to monetary policy tightening expectations which overshadowed concerns about an escalating crisis over Ukraine. Euro zone money markets showed investors scaled back their expectations for European Central Bank moves in 2022 but still forecasting several rate hikes. They priced in around a 95% chance of a 10 basis point rate hike in July and one of 40 points by year-end. On the data front, German business improved in February, as businesses hope for an end to the coronavirus crisis, also boosting the euro. Immediate resistance can be seen at 1.1350. A breakout up can trigger growth towards 1.1400.
USD/CAD: The Canadian dollar was little changed against the U.S. dollar on Tuesday as investors weighed the economic impact of Russia-Ukraine tensions, and the price of oil, one of Canada’s major exports, gave back some of its earlier gains. Oil touched its highest since 2014 at $96 on fears of interruption in oil supplies. In case of further growth in the cost of oil, the Canadian dollar will receive additional support. Immediate support is seen at 1.2720. A breakout below could take the pair towards 1.2650.