The US dollar was in demand yesterday and finished with gains against the G-10 major currencies.It managed to hang on to most of those gains in a somewhat sluggish overnight session. AUDUSD and NZDUSD were the outliers. Both currency pairs posted small gains on hopes for positive results from the Trump/Jinping meeting at the end of the week. Kiwi topped out after a wider than expected trade deficit was reported.
President Trump told the Wall Street Journal that he expects to raise tariffs on Chinese imports to 25% in January, despite China asking him to refrain from doing so. Then he said he would put 10% to 25% tariffs on another $267 billion of Chinese imports. Trump meets with his Chinese counterpart at the end of the week, and some see his remarks as part of the American negotiating strategy.
US Housing Price Index and Case-Shiller Home Price Indices are due this morning. The data will be preceded by a speech from Fed Vice Chair Richard Clarida.
EUR & GBP
EURUSD traded heavily despite news that Italy planned to tweak its planned budget deficit to 2.2% from 2.4%. Traders were also unhappy with recent weak data reports from the Eurozone. GBPUSD tracked EURUSD lower. The UK Parliament is expected to vote on May’s Brexit deal on December 11. USDJPY was steady in a 113.42-65 range, supported by the rebound on Wall Street yesterday.
USDCAD is flirting with resistance in the 1.3280 area. Prices are supported by weak oil prices and negative sentiment from the news that GM is closing its Oshawa facilities which according to Scotiabank economists accounts for 0.15% of Ontario’s GDP. BMO economists suggest the closure will knock off 0.2% from Canada’s GDP.
The intraday USDCAD technicals are bullish following yesterdays break above resistance at 1.3230 which is now targeting a break above 1.3280 to extend gains to 1.3330 and then 1.3380. For today, USDCAD support is at 1.3230, 1.3205 and 1.3170. Resistance 1.3280 and 1.3330.
Today’s Range 1.3210-1.3280