The USD had mixed results versus major pairs during the past week. The greenback advanced against the EUR, GBP and CHF but the turnaround in commodities boosted the AUD, NZD and CAD with the JPY also appreciating versus the USD thanks to safe haven flows. The biggest event this week on the forex calendar was the release of the Federal Open Market Committee (FOMC) January meeting minutes. The notes showed Fed members are concerned about economic developments abroad but confident on U.S. growth the biggest takeaway for investors was that although the March FOMC meeting rate hike appears to be dead on arrival, the probabilities of at least 1 rate raise this year are back on.
Most central banks skipped February and will return to action in March. The European Central Bank (ECB), the U.S. Federal Reserve and the Bank of Japan (BOJ) will use conventional, unconventional and all the rhetoric they can muster to achieve their individual objectives. The International Monetary Fund (IMF) and the Organization for Economic Co-operation and Development (OECD) have urged nations to work together as a way out of the global economic conundrum. The Group of 20 meeting at the end of this week should spark a more unified response to what remains a global crisis.
The price of energy has been more stable after the joint announcement of a production freeze by the Organization of the Petroleum Exporting Countries (OPEC) and Russia. The details are scarce and although Iran supports the agreement in principle they are likely not to follow through, as they want to at least match their pre-sanction production levels. Commodity currencies have been linked to the price of crude ups and downs and will remains heavily correlated as long as a clear agreement is reached or there are positive signs of rising demand.
