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Commodity-tied Currencies Boosted by Oil Rally as Red Sea Tensions Escalate

  • Commodity- and oil-tied currencies are trading well, with CAD and NOK on the front foot alongside the run higher in oil prices. WTI and Brent crude futures are seen supported on the back of the joint strikes on Houthi militants by US and UK air forces following a series of attacks on tankers and container ships in the Red Sea. The uptick in tensions across the region has raised a bidtone in crude, putting Brent futures within range of $80/bbl and the 200-dma at 79.81.
  • EUR/NOK is resultingly lower for a second session, but the bear trigger in the cross remains in sight at the late Dec low of 11.1760.
  • Despite post-CPI strength in the USD currency, the dollar sales through the WMR fix have held early Friday, keeping the USD Index within range of 102.158, the Thursday low.
  • EUR/USD is off overnight highs, however, drifting lower on generally light volumes across the morning. 1.0963 intraday support has given way, with 1.0955 undercutting as the next level.
  • PPI data rounds off the US data releases for the week, after yesterday's US CPI came in ahead of expectations. Fed's Kashkari is also set to speak, as well as ECB's Lane - who may be eyed for any comments on rate cuts of a larger magnitude than 25bps this year, after ECB's Vujcic floated that larger cuts would be possible should the data warrant such a move.

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