Overnight Range 1.3402-1.3448        

The US dollar recouped the bulk of its overnight losses in New York trading. There was a barrage of economic reports.  Jobless Claims hit a 43-year low and October CPI was a tick better than expected.

Janet Yellen’s pretty much pre-announced a rate increase in December.

In her prepared remarks to the Senate Banking Committee, she said that “At our meeting earlier this month, the Committee judged that the case for an increase in the target range had continued to strengthen and that such an increase could well become appropriate relatively soon if incoming data provide some further evidence of continued progress toward the Committee’s objectives.”

Overnight, the US dollar rally was halted in its tracks.   That was due, in part, to a modest dip in bond yields. The magnitude of the dollar’s gains following the Trump victory suggest that the overnight sell-off is just a bout of profit-taking rather than a change in sentiment. In addition, a dash of caution may have been sprinkled over the markets ahead of Fed Chair Janet Yellen’s testimony to the Senate Banking Committee.

Australia reported another weaker-than expected employment report, posting an increase of 9,800 new jobs vs. the consensus forecast for an gain of 20,000. The unemployment rate was unchanged. AUDUSD dipped on the news but recovered quickly as this report is as wonky as it’s Canadian counter-part.

NZDUSD drifted higher throughout the overnight session, buoyed by general US dollar weakness.

USDJPY was bought during the Asia session but the gains fell far short of Wednesday’s peak. European traders drove the currency pair down to the 109.00 area from 109.45. The Nikkei 225 closed unchanged on the day.

EURUSD extended Wednesday afternoon’s New York gains in early Asia trading.  That move ran out of steam and EURUSD was back at the opening levels when Europe started their day. Europe took EURUSD from 1.0682 to 1.0736. Traders ignored a softer than expected Eurozone inflation report. (Actual Oct.  CPI 0.2% vs. forecast 0.3%, Sept. 0.4%, m/m)

Sterling popped from an overnight low of 1.2408 to 1.2503 on very strong October Retail Sales data. (Actual 1.9% vs. forecast 0.4%, ex fuel, 7.6% vs. forecast 5.4%) Prices quickly retreated to 1.2470 as the reality of Brexit set in.

Oil prices moved higher in overnight trading, rising from a low of $45.26 to $46.17 in early New York trading. Prices are supported by optimism surrounding an Opec production cap agreement.

USDCAD traded within a narrow band. General US dollar weakness and rising oil prices were off-set, to a degree, by uncertainty surrounding the fate of NAFTA.

USDCAD technical outlook

The intraday USDCAD technicals are bearish.  USDCAD has declined steadily since peaking at 1.3586 on Monday. That downtrend line remains intact while prices are below 1.3480. A break of minor support at 1.3400 will extend losses to 1.3380 and then 1.3340.  For today, USDCAD support is at 1.3380 and 1.3340.  Resistance is at 1.34325 and 1.3480

Today’s Range 1.3380-1.3460

Chart:  USDCAD  1 hour