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CURRENCIES: Recent FX Action Across the Bands

· 02/08/2021 01:55

06:51 AM EST, 02/08/2021 (MT Newswires) -- As at near 6.40am ET, the dollar had found a footing after posting fresh declines against some currencies, which extended losses seen on Friday following the headline payrolls miss. However, the details of the jobs report (hours worked and earnings) were strong, and U.S. yields remained perky.That, along with the approaching mega-stimulus spending binge, has ensured the dollar picked up demand on dips. The DXY dollar index edged out a six-day low at 91.21 before capping out, while EUR-USD pegged a six-day high at 1.2055 before turning over. The yen underperformed, which lifted USD-JPY moderately, to a high at 105.67, reversing a good portion of the decline seen on Friday after the pair clocked a three-month high at 105.78. Yen crosses were firm, with EUR-JPY posting a one-week high and AUD-JPY reaching above 81.00 for the first time since December 2018. Cable ebbed back to levels around 1.3700 after testing Friday's one-week high at 1.3742. AUD-USD also fell back after earlier lifting to a 10-day high at 07682.

Meanwhile, USD-CAD remained heavy but held just above the 1.2749 10-day low that was seen on Friday. Oil prices posted fresh trend highs once again. Front-month WTI crude futures printed a fresh 13-month high at US$57.67. Oil has been underpinned by a variety of factors lately, ranging from demand-stimulating cold weaker in Europe, to the large inventory draw in weekly U.S. data last week, to continuing OPEC+ supply constraint (Saudi Arabia last week commenced a unilateral supply cut that will last through to the end of March), and the approaching mega-stimulus program in the U.S. There are downside risks to the oil market ahead, given the juxtaposition of prices having returned far into pre-pandemic ranges and with global demand not likely to return to pre-pandemic levels for a considerable time yet.

In news, a study found the Oxford/AstraZeneca Covid vaccine was less effective in dealing with the so-called South African variant of SARS-Cov2 coronavirus. The other vaccines are looking to be similarly less effective against this strain, too, though some experts have been downplaying it, saying that the existing vaccines can be easily tweaked to adapt to new variants. Global stock markets haven't been too perturbed, and have remained underpinned.