November 13, 2024
- Trump cabinet picks risk global growth slowdown
- US inflation rises 0.2% as expected.
- US dollar steady but bid
FX at a Glance
Source: IFXA/RP
USDCAD open 1.3958, overnight range,1.3941-1.3963 Friday close 1.3945
USDCAD drifted higher alongside broad US dollar strength during an uneventful overnight session. Today’s October US inflation numbers came in as expected and barely caused a ripple in FX markets, leaving the focus for the rest of the day on announcements for the incoming Trump administration.
USDCAD gains are now encountering major resistance, and the currency appears modestly overbought. However, the downside remains limited due to divergent central bank policies and the potential negative impact of Trump’s tariffs on the Canadian economy.
WTI oil traded sideways within a 67.97-68.87 range, constrained by increased risks of slower global growth amid OPEC production increases.
USDCAD Technicals
The intraday USDCAD technicals are bullish while trading above 1.3940 and looking for a break above the 2024 peak of 1.3967, but the uptrend is steep and vulnerable. A break below 1.3940 suggests further losses to 1.3910 which if broken will lead to 1.3840.
The daily chart suggests any move toward the 1.3840-60 area will just be a correction, unless 1.3840 is broken decisively.
For today, USDCAD support is 1.3940 and 1.3910. Resistance is 1.3990 and 1.4020.
Today’s Range 1.3920-1.4020.
Chart: USDCAD 4hour
Elon’s Coming
Future trillionaire Elon Musk will soon have a side-hustle as co-head of a Donald Trump-created Department of Efficiency. He will be partnered with Vivek Ramaswamy, and the duo is charged with creating a more efficient government that will slash excess regulations, cut wasteful spending (there go all politicians), and restructure federal agencies. President Trump stated these are “informal roles” that do not require Senate approval. Back in October, the New York Times wrote that if the appointments became reality, it would “essentially give the world’s richest man and a major government contractor the power to regulate the regulators who hold sway over his companies, amounting to a potentially enormous conflict of interest.”
Inflation May Be Down, But Is It Out?
Fed officials are downplaying deep rate cuts. Minneapolis Fed President Neel Kashkari tossed out a “higher than expected neutral rate” to justify any Fed decision to limit rate cuts, while also suggesting it may take “a year or two” for inflation to reach its 2.0% target. October CPI rose as expected
The October CPI report was tame enough for bond traders to take some profit and the 10-year Treasury yield slipped from 4.42% pre-CPI to 4.39% immediately afterwards.
EURUSD
EURUSD bobbed and weaved in a 1.0593-1.0630 range and is trading at 1.0614 in New York. With no actionable Eurozone economic reports, divergent economic growth and interest rate concerns are driving direction. EURUSD could see a profit-taking rally toward 1.0700 if CPI prints lower than expected.
GBPUSD
GBPUSD traded sideways in a 1.2729-1.2756 band. Yesterday’s UK employment data wasn’t weak enough to deter the Bank of England from potential rate cuts, primarily due to persistently high pay growth. Technical indicators are bearish as long as prices remain below 1.2850.
USDJPY
USDJPY continued its upward grind, rising from 154.51 to 155.24 on the back of higher US yields. The 10-year yield rose from 4.32% to 4.45% yesterday, consolidating around 4.42% overnight. While BoJ officials commented on “excessive moves” last week as prices topped 155.00, they appeared unperturbed by this latest foray above that level.
AUDUSD and NZDUSD
AUDUSD drifted in a 0.6514-0.6540 range as traders held off ahead of today’s US inflation figures. The currency is also under pressure due to the prospect of Trump tariffs on China slowing Chinese growth. Australia’s employment report is due tomorrow. NZDUSD remained steady in a 0.5918-0.5935 range, with technical indicators bearish below 0.6040.
USDMXN
USDMXN traded within a 20.4468-20.6384 band. The combined influences of potential US tariffs, Mexican political concerns, and a mass expulsion of illegal immigrants continue to reinforce the uptrend line from July, which could come into play at 19.8000.
BTCUSD (Bitcoin)
BTCUSD continues to hover in an 85,128-89,815 range. The proximity to the 90,000 level—significant mainly for its round number status—sparked a bit of profit-taking, causing prices to drop from the peak to the low. However, as corrections go, this one has been minor.
FX high, low, open (as of 6:00 am ET)
Source: Investing.com
China Snapshot
PBoC fix: 7.1991 vs previous. 7.1927
Shanghai Shenzhen CSI 300 rose 0.62% to 4110.89.
The PBoC fixed the yuan to its lowest level in 14 months in the wake of Trump appointments viewed as “China Hawks.”
Chart: USDCNY and USDCNH
Source: Investing.com
