Overnight Range 1.3319-1.3387
The US dollar has inched higher since New York trading started and the Loonie has been slip-sliding away in lockstep with declining oil prices.
Overnight, the US dollar eked out small gains against Sterling Aussie and the Loonie while staying almost unchanged versus Euro, Kiwi and the Swiss franc. It lost ground against the yen. It was an uneventful pre-holiday trading session and traders merely went through the motions.
In Asia, NZDUSD traders ignored data from Consumer Survey, Building Permits and Business Confidence due to concerns about the prospect for higher US rates in the coming months.
A forecast by the Australian government for a smaller than expected budget deficit gave AUDUSD a very short-lived bounce and it opened in New York at the overnight low.
USDJPY was the biggest loser, dropping from 118.00 to 116.96 as it tracked the Nikkei lower. Both the Nikkei and USDJPY recovered off their worst levels
In Europe, EURUSD did not get any traction from the strong German IFO report. IFO Current Assessment, Business Climate and Expectations handily exceeded forecasts. The IFO warned that ECB rates are too low for Germany.
GBPUSD trade sideways until mid-morning in Europe when it dropped from 1.2500 to 1.2419 at the New York open. Scotland is promising another Referendum on separation from the UK unless it can stay in the EU. “It remains my view, and that of the government I lead, that the best option for Scotland remains full membership of the EU as an independent member state,” Scottish first Minister Nicola Sturgeon said according to a Bloomberg article.
Oil prices see-sawed within a $52.00-50 range largely due to the softer profile for the US dollar but have since headed lower in New York trading.
The US releases second tier data (Markit services PMI-preliminary) which won’t get anyone excited. The US dollar is unlikely to deviate very far from current levels and will take direction from bonds and equities. Tis the season to be jolly and traders have their party hats on.
USDCAD Technical outlook:
The intraday USDCAD technicals are bullish. The break above 1.3150 on December 14 snapped an intraday downtrend. The renewed uptrend will remain intact while prices are above 1.3310, looking for a break of the recent 1.3415 top to extend gains to 1.3540. A break below 1.3310 would lead to support at 1.3260.
Today’s Range 1.3330-1.3430
Chart: USDCAD 1 hour