There was a lot going on overnight, just not in FX markets.
Trader’s were keeping a close eye on Trump’s Twitter for hints of policy initiatives in response to North Korea’s offer of “gifts” to America. There weren’t any.
Hurricane Irma is still tracking a Florida landfall, and Hurricane Mario Draghi is getting ready to hit the stage on Thursday.
AUDUSD ticked higher in early trading continuing the Tuesday afternoon New York rally, touching 0.8019. Prices unravelled when Q2 GDP rose only 8%, q/q. Traders expected a forecast beating number. AUDUSD declined to 0.7970 in early New York trading.
NZDUSD gains were capped by the downtrend line from August 7, at 0.7260 and dropped to 0.7212 in New York.
USDJPY trade sideways in a 108.46-10894 range. Prices are at the top end of that band. Low US Treasury yields and safe-haven demand are weighing on the currency.
EURUSD is in ECB mode. Prices are “to-ing and fro-ing” as positions get adjusted ahead of Thursday’s meeting and Draghi’s press conference.
Sterling inched higher in a narrow 1.3020-1.3046 band
Oil prices consolidated yesterday’s gains in a $48.55-$48.89 crude demand as traders evaluate the potential impact of Hurricane Irma.
USDCAD see-sawed in a 1.2367 to 1.2397 range ahead of today’s Bank of Canada policy meeting. Canada Trade Deficit narrowed to $3.04 billion, but the data was ignored.
FX markets will be in a holding pattern today do to the ECB meeting on Thursday. There is only US Trade data on tap but in light of equity market weakness, North Korea and Hurricane Irma, traders will not be highly motivated.
USDCAD traders will. Only 9 of 33 economists survey by Reuters expect the BoC to raise rates today. If they do, USDCAD will test 1.2250. If not, USDCAD may rally, but those gains will be capped around the 1.2460 level
USDCAD Technical outlook:
The intraday USDCAD technicals are bearish while prices are below 1.2580 and looking for a break below 1.2340 to extend losses to 1.2250.For today, USDCAD resistance is at 1.2420 and 1.2460. Support is at 1.2340 and 1.2290
Today’s Range 1.2320-1.2420
Chart: USDCAD 30 minute