Overnight Range 1.3057-1.3135
US September CPI rose 0.3% while the core rate gained 0.1%. The headline CPI was as predicted while core was a tick lower. EURUSD rallied (modestly) and USDCAD dipped but those moves were quickly reversed. The overnight greenback retreat appears to have come to a halt.
Overnight, US dollar buyers appeared to have had second thoughts and went into “retreat” mode. The greenback lost ground against every G10 currency with the exception of the Japanese yen, although by early New York trading, dollar losses were not unaminous
The dollar’s woes in Asia were a continuation oif the pattern seen in North America on Monday. The usually benign NY Empire Manufacturing Survey, which was far weaker than expected, garnered far more attention than normal. It was seen as further evidence of a ragged and sluggish US economy and a reason for the Fed to remain cautious.
AUDUSD got an added boost in Asia after the RBA Governor Phillip Lowe’s speech. He was reasonably upbeat, seeing light at the end of the tunnel for the mining slump and indicated that the current exchange rate and interest rate levels were approriate. NZDUSD followed the AUDUSD higher aided by higher than expected CPI Data.
USDJPY drifted lower on the lowered US rate hike expectations, although not in a meaningufl way.
EURUSD rallied throughout the Asia session but was unable to extend gains above 1.1025 then meandered within a 1.1004-1.1025 range until the New York open.
It was a different story for sterling. GBPUSD jumped higher in Asia and then an immpressive array of UK data releases fueled further gains in a short squeeze move. GBPUSD traded in a 1.2183-1.2302 range, opening at the high in New York.
The rally down under lit a fire under the Loonie. USDCAD started sliding right on the Asia open and continued down throughout the European session. General US dollar weakness combined with oil prices parked above $50.00/barrel contributed to the move. In addition, the failure of USDCAD to extend gains above 1.3315 has led to some dollar bulls trimming positions.
USDCAD technical outlook.
The intraday USDCAD technicals are bearish while prices are below 1.3120, supported by the overnight move below 1.3080 which warns of further losses to 1.2990-1.3000 area. This is a key area and one that has acted as a pivot for the past couple of months. 1.3000 is the middle of the 1.2700-1.330 range that has trapped USDCAD since June. For today, USDCAD support is at 1.3040, 1.3010 and 1.2990. Resistance is at 1.3090 and 1.3130
Today’s Range 1.3050-1.3120