April 30, 2024
- US Q1 Employment Cost Index rises 1.2% (forecast 1.0%)
- Canada GDP rises 0.2% in February, below expectations.
- USD ending April with gains all around except against AUD.
FX at a Glance-March 28-April 30, 2024
Source: IFXA/RP
USDCAD Snapshot: open 1.3687, overnight range 1.3657-1.3739, close 1.3662.
USDCAD started the session with a bit of a bid then spiked through the overnight peak of 1.3687 to reach 1.3739 in the wake of the weaker than expected Canadian GDP report. StatsCanada reported “Real gross domestic product (GDP) increased 0.2% in February, following a 0.5% gain in January. Services-producing industries (+0.2%) led the growth for a second month in a row, fuelled by gains in transportation and warehousing. The goods-producing industries aggregate was essentially unchanged as the mining, quarrying, and oil and gas extraction sector expanded while the utilities and manufacturing sectors contracted in February.”
Today’s data reinforces the odds that the Bank of Canada will cut rates on June 5 which will underpin USDCAD especially if Fed Chair Powell’s press conference comments on Wednesday are deemed to be hawkish.
WTI oil prices continue to shuffle between $81.00 and 84.00 and they drifted inside a 82.28-83.25 range overnight.
USDCAD Technicals
The USDCAD technicals are neutral inside a 1.3620-1.3740 range which is likely to contain price action until the FOMC decision on Wednesday. The intraday technical are bullish above 1.3640 looking for a test of 1.3740.
The 2024 USDCAD uptrend is intact while prices are above 1.3540 which is also where the 200 day moving average comes into play.
For today, USDCAD support is at 1.3640 and 1.3610. Resistance is at 1.3740 and 1.3780. Today range is 1.3640-1.3740.
Chart: USDCAD 4 hour
Source: Investing.com
Employees are Costing More.
The quarterly employment cost index jumped to 1.2% from 0.9% previously. Fed Chair Jerome Powell relatedly said that policymakers need more confidence that inflation is steadily which will not help the Fed or Chair Jerome Powell’s confidence that inflation is steadily falling. Today’s data does not improve the confidence one iota. The results gave the US dollar a boost and lifted the US 10-year yield to 4.66% from 4.626% at the open. S&P 500 futures added to its losses and are down 0.41%, while gold (XAUUSD) dropped from an overnight peak of 2336.23 to 2304.77.
Un-guided Missile
A UN “expert” claims that a North Korean missile that landed in Kharkiv, Ukraine, was from North Korea. It is either evidence that North Korea is supplying Russia with weapons, contravening sanctions, or it may be a test missile aimed at the Sea of Japan but was using a Tesla self-driving system.
EURUSD
EURUSD is trading defensively, post ECI data, in a 1.0689-1.0736 range. Support from slightly higher Eurozone and German GDP was offset by Eurozone Core-HICP rising 2.7%, compared to the estimate for a 2.6% y/y increase. Traders are biding their time until tomorrow’s FOMC results.
GBPUSD
GBPUSD dropped to the bottom of its 1.2502-1.2563 range due to both the risk of widening UK and US interest rate differentials and from EURGBP demand after the better than expected Eurozone GDP data.
USDJPY
USDJPY blew through the top of its overnight 156.07-156.99 range and touched 157.51 in the wake of the ECI data. March Industrial Production rose 3.8% m/m, easily topping the estimate of 3.4% but poor Retail trade data (actual -1.2% m/m vs forecast 0.6%) made it a wash.
AUDUSD and NZDUSD
AUDUSD traded in a 0.6499-0.6568 range with the bottom being hit following this mornings US data. Weaker than expected Australian Retail Sales (actual -0.4% m/m, forecast 0.2%) weighed on prices in Asia.
NZDUSD traded in a 0.5915-0.5981 range. Gains were capped by news that Business Confidence dropped to a seven-month low in April. (Actual 14.9%, previous 22.9%)
USDMXN
USDMXN is consolidating the losses that occurred on Monday in a 16.9821-17.0590 range today. Q1 GDP rose 0.2% a tick higher than the 0.1% expected.
Bitcoin (BTCUSD)
BTCUSD traded negatively, falling from 64,800 to 61,511 in early NY due to caution ahead of tomorrow’s FOMC decision. The debut of spot bitcoin in ETFs in Hong Kong was unimpressive, attracting just $6.3 million in volume during the morning session.
FX high, low, open (as of 6:00 am ET)
Source: Investing.com
China Snapshot`
PBoC fix: 7.1063 (prev. 7.1066)
Shanghai Shenzhen CSI 300 fell 0.54% to 3604.39.
Caixin April Manufacturing PMI 51.4, forecast 51, March 51.1 NBS Manufacturing PMI 50.4, forecast 50.3, March 50.8, Non-manufacturing PMI 51.2, forecast 52.2, March 53.
Chart: USDCNY and USDCNH 4 hour
Source: Investing.com
