Q4 GDP rose 2.9%, well above the 2.7% that was forecast. The US dollar posted small gains immediately afterwards, but the moves have been subdued. Traders are cautious and keeping an eye on equity markets. Asia and European markets are down, however, US equity futures are pointing to a mixed opening on Wall Street. Traders are also biding their time ahead of the Easter Weekend holidays A large swath of Eurozone countries get Thursday off as well as Monday.
FX traders didn’t find anything to get excited about in Asia or Europe which made for an uneventful session.The highlight may have been confirmation that Kim Jong-Un met with Chinese President Xi Jinping.
EURUSD see-sawed in a 1.2377-1.2420 range, opening in New York at 1.2390 and is currently at 1.2410. European equity indices are in the red. German Consumer Confidence data was unexpectedly firmer The GfK Consumer Confidence Survey rose to 10.9. Forecasters expected a dip to 10.7.
Sterling was the liveliest of the bunch. GBPUSD bounced inside a 1.4198 to 1.4135 range it dropped back to 1.4138 after the GDP data. The intraday technicals are bearish and suggest further downside today. The UK CBI Distributive Trade Survey (measures short-term retail and wholesale distribution trends) was a negative 8%, well below the forecast for a gain of 15%. Poor weather gets the blame.
USDJPY ticked higher in Asia and Europe, rising from 105.34 to 105.71, partly because risk aversion trades were unwound on the NK/China news. It popped to 106.32 after US Q4 GDP.
AUDUSD and NZDUSD churned in narrow ranges. Both currency pairs remain under pressure due to expectations for higher US rates and soft commodity prices. Weaker than expected New Zealand Business confidence (-20 vs p[revious -19) didn’t help Kiwi.
USDCAD was largely ignored but traded near the top end of its recent 1.2820-1.2920 range. Expectations of USDCAD demand for month-end combined with forecasts for a dip in Canada GDP for January (due tomorrow) have underpinned the currency pair.
USDCAD Technical Outlook
The intraday USDCAD technicals are rangebound inside a 1.2820-1.2920 band. A break above 1.2920 targets 1.2980 and then 1.3020. For today, USDCAD support is at 1.2850 and 1.2820. Resistance is at 1.2920 and 1.2950
Today’s Range: 1.2860-1.2940.