Daily Afternoon Report 23.02.2016

The U.S. dollar moved higher against its Canadian counterpart on Tuesday, as declining oil prices dampened demand for the commodity-related Canadian currency, while investors awaited the release of U.S. data later in the day.

The Canadian dollar weakened as oil prices began to decline once more on Tuesday as concerns over rising Iranian production following the end of international sanctions resurfaced.

Separately, OPEC Secretary-General Abdalla Salem El-Badri said on Monday that oil producers are still “feeling the water” over a possible deal to freeze production.

Meanwhile, investors eyed the release of consumer confidence and home sales data due later in the day, for further indications on the strength of the economy after strong U.S. inflation data on Friday added to expectations for additional rate hikes by the Federal Reserve this year.

In the eurozone, data on Tuesday showed that the German Ifo Business Climate Index fell to a 14-month low of 105.7 in February from a reading of 107.3 in January, below forecasts for 106.7.

Sterling remained under pressure amid ongoing discussions over a possible British exit from the European Union.

In the Bank of England’s Inflation Report hearings on Tuesday, BoE governor Mark Carney said that the central bank would treat the Brexit like any other political event.

Meanwhile, Swiss National Bank Thomas Jordan warned it could not take “endless” steps to ease monetary policy.

Jordan also noted that central bankers must continuously assess the effects of their monetary policies, which can weaken over time.

The remarks were seen as an indication that the SNB would refrain from making further cuts to interest rates.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was little changed at 97.36, still close to the previous session’s two-and-a-half-week high of 97.61.