Overnight Range 1.3456-1.3512
It is a quiet end to the week. The US dollar opened in New York, lower across the G10 spectrum. Trading desks are operating with reduced staff and equity markets close at 1:00 pm EST.
Japanese traders bought USDJPY, taking the currency pair to 113.90 from 113.16 on the back of higher US 10 year Treasury yields. That move quickly ran out of steam and USDJPY slid throughout the European session to open in New York at 112.75. Japan CPI data came in “as expected” and was ignored.
AUDUSD was in demand, buoyed by rising commodity prices, particularly iron ore. Pre-weekend profit takers emerged in Europe and Aussie gave back half of its gains.
Kiwi rose, supported by general US dollar weakness and a narrowing of the trade deficit. NZDUSD climbed to 0.7050 from 0.6980 and started the New York session just below the peak.
EURUSD managed to hang on to most of the gains made in Asia. There wasn’t any particular reason for the single currency’s strength and EURUSD is back to Monday’s levels.
Sterling chopped around in a 1.2400-95 range. UK Q3 GDP was 0.5%, as expected. Traders were torn between the promise of additional UK growth from new fiscal stimulus measures and the uncertainty surrounding Brexit. GBPUSD will close in London, well above Monday’s low of 1.2311
Oil prices traded sideways in Asia and then edged lower in Europe. Traders are concerned about the prospect of a production cap agreement being finalized at the Opec meeting on November 30.
The major Asia equity indices closed with small gains while their European counterparts are flat to down.
The Canadian dollar is a by-stander in global FX markets. USDCAD is supported by widening CAD/US interest rate differentials, a sluggish domestic economy and concern about Donald Trump’s NAFTA plans. The prospect of another oil price rally on an Opec production cut agreement offsets some of the Canadian dollar negatives.
FX trading will be subdued as today is a partial holiday in America. Trading desks run with a reduced staff and equity markets close early. This morning’s data (Markit Services PMI, Wholesale Inventories and Goods Trade Balance) are second tier releases and won’t do anything to alter the December rate hike view. There isn’t any data from Canada.
USDCAD technical outlook
USDCASD is trading choppily within a 1.3360-1.3580 trading band. The move below 1.3505 yesterday shifted the intraday technicals to bearish. A break of minor support at 1.3460 will extend losses to 1.3420 and then 1.3360. A recovery above 1.3505 will lead to another probe of resistance at 1.3580 which if broken hangs a target on the 1.3815 level. For today, USDCAD support is at 1.3460 and 1.3420. Resistance is at 1.3520 and 1.3560.
Today’s Range 1.3440-1.3530