14 February 2022 Weekly Analysis
GCMAsia Weekly Report: February 14 – 18
Market Review (Forex): February 7 – 11
US Dollar
The dollar index which traded against a basket of six major currencies soared after a drop at market open today, as US President Joe Biden commented on the Russia-Ukraine matter last weekend. As the tensions between Ukraine and Russia grows, growing fears among investors has drove the US dollar higher.
Investors are moving their investments into safe haven assets such as US dollar and commodities after US President Joe Biden made statements on tensions between Russia and Ukraine. Based on a video call with Biden, he will respond and take action immediately along with the allies if Russia decides to invade Ukraine. Besides that, he also urges all US citizens to leave Ukraine immediately within 48 hours. Other countries such as Britain, Japan, Latvia, Norway and the Netherlands are also included.
The dollar was trading sideways earlier last week after University of Michigan’s preliminary consumer sentiment index for February had released. The report stated that US consumer sentiment dropped heavily amid expectations that inflation would continue to rise in the long term.
Nonetheless, the overall market movement remain positive as market participants are investing into dollar as well as other commodities. As for now, investors would continue to scrutinize updates from the crucial economic events such as the US Retail Sales and Initial Jobless Claims in order to gauge the likelihood movement for the dollar. As of writing, the dollar index was traded at 96.01.
USD/JPY
Pair of USD/JPY extended its gains last week to 114.98. Japanese yen received broad selloff throughout the week as investors expects Federal Reserve to tighten their monetary policy at a faster pace. Evidently, latest CPI result from US suggests so as it reaches 7.5%, its highest level since 1982. However, overall uptrend on the pair was limited as tension in between Russia and Ukraine continue to rise.
EUR/USD
Pair of EUR/USD extended its losses last week, closing at 1.1350. Euro received substantial selling pressure as European Central Bank members signaled a more dovish approach as compared to their last policy meeting. Several ECB members warned the overreaction towards short-term rise in inflation as preemptive interest rate rise may jeopardize the economic recovery in the mid-to-long-run. In addition, ECB President Christine Lagarde emphasized that it is too early to call for an interest rate hike and they will continue to monitor upcoming economic data in order to get a better perspective.
GBP/USD
The pair of GBP/USD was traded lower, closing the week at 1.3561 while remains traded within a small range. Pound sterling was traded lower following rising Brexit risks in the region. During press conference, UK Prime Minister Boris Johnson threatened to invoke Article 16 if UK and EU failed to attain garner positive developments with regards to Brexit deal. Investors fear that UK may ran out of time in reaching a deal with EU and it may lead to economic recession if both parties failed to achieve a deal.
Market Review (Commodities): February 7 – 11
GOLD
Gold price was traded higher last week, closing its price at $1,859.14 a troy ounce. Market demand for gold rose sharply following rising tension in between Russia and Ukraine. According to Reuters, Russia has amassed more than 100,000 military forces near Ukraine’s border, indicating possibility of launching an attack anytime soon. Investors fear that financial stability in the region will be undermined, thus shifting their capital into safe-haven assets such as gold. For the time being, investors will monitor developments in between Russia and Ukraine in order to gain more market signals.
CrudeOIL
Crude oil price extended its gains last week, closing at $93.91 per barrel. Crude oil price remains in an uptrend due to ongoing tension in between Russia and Ukraine. Investors speculate that oil production and export will be jeopardize if Russia move ahead to attack Ukraine. The action will be led to enactment of sanctions and trade tariffs from US upon Russia, causing a major disruption in global oil supply. Moreover, war that sparked in between Russia and Ukraine will temporarily suspend the region’s trading route at the Black Sea, causing major import and export disruption in crude oil as well.
Weekly Outlook: February 14 – 18
For the week ahead, investors would continue to focus on crucial economic data from the UK, EU and US this week in order to determine each currencies’ trend direction.
As for oil traders, they will be eyeing on US inventories level reported by API and EIA to gauge the strength of crude demand for world’s largest oil consumer.
Highlighted economy data and events for the week: February 14 – 18
| Time | Market | Events | Actual | Forecast | Previous |
| Monday – 14th February 2022 | |||||
| N/A | |||||
| Tuesday – 15th February 2022 | |||||
| 0:15 | EUR | ECB President Lagarde Speaks | – | 53.5 | 51.7 |
| 7:50 | JPY | GDP (QoQ) (Q4) | – | 1.40% | -0.90% |
| 8:30 | AUD | RBA Meeting Minutes | – | ||
| 15:00 | GBP | Average Earnings Index +Bonus (Dec) | – | 3.90% | 4.20% |
| 15:00 | GBP | Claimant Count Change (Jan) | – | -36.2K | -43.3K |
| 18:00 | EUR | German ZEW Economic Sentiment (Feb) | – | 53.5 | 51.7 |
| 21:30 | USD | PPI (MoM) (Jan) | – | 0.50% | 0.30% |
| Wednesday – 16th February 2022 | |||||
| 15:00 | GBP | CPI (YoY) (Jan) | – | 5.40% | 5.40% |
| 21:30 | USD | Core Retail Sales (MoM) (Jan) | – | 0.80% | -2.30% |
| 21:30 | USD | Retail Sales (MoM) (Jan) | – | 1.80% | -1.90% |
| 21:30 | CAD | Core CPI (MoM) (Jan) | – | – | |
| 23:30 | USD | Crude Oil Inventories | – | – | -4.756M |
| Thursday – 17th February 2022 | |||||
| 3:00 | USD | FOMC Meeting Minutes | – | -15.0K | 64.8K |
| 8:30 | AUD | Employment Change (Jan) | – | 1.750M | 1.885M |
| 21:30 | USD | Building Permits (Jan) | – | 220K | 223K |
| 21:30 | USD | Initial Jobless Claims | – | 20 | 23.2 |
| 21:30 | USD | Philadelphia Fed Manufacturing Index (Feb) | – | -15.0K | 64.8K |
| Friday – 18th February 2022 | |||||
| 14:00 | GBP | Retail Sales (MoM) (Jan) | – | 0.60% | – |
| 21:30 | CAD | Core Retail Sales (MoM) (Dec) | – | -2.30% | 6.80% |
| 23:00 | USD | Existing Home Sales (Jan) | – | 6.12M | 1.10% |