Overnight Range 1.3055-1.3117  

The loonie soared following this morning release of stronger than expected inflation data.  CPI  jumped to 2.1% in January, handily beating the forecast of a 1.6% gain. However, the bulk of the gain was due to gasoline which, when excluded shows only a 1.5% gain. USDCAD dropped from 1.3115 prior to the release to 1.3055 immediately afterwards.

The overnight session was a lot more subdued.

President Trump is at it again.The bombastic, hyperbolic “leader of the free world” called China a currency manipulator which contradicted his Treasury Secretary’s claims a few hours earlier.

President Trump, talking about China, said in a Reuters interview “Well they, I think they’re grand champions at manipulation of currency. So I haven’t held back. “We’ll see what happens.”  Earlier, Treasury Secretary  Stephen Mnuchin said he wasn’t ready to pass judgement on China’s currency practices.

To their credit China took the high road. A spokesman for China’s foreign ministry said that if they were Grand Champions it was grand champion of “economic development.”

With that kind of nonsense going on, it is easy to see why FX traders stayed close to home

In Asia, Reserve Bank of Australia Phillip Lowe said that he would like to see the currency lower but that it was not overvalued. He had said it before so it didn’t cause much of a ripple.

USDJPY traded quietly in Asia and edged lower in Europe with a drift lower in Treasury yields accounting for the move.

EURUSD consolidated yesterday’s gains but had an upward bias.  Sterling traded with a similar tack.  GBPUSD consolidated its gains after breaking resistance in the 11.2510-20 area.

Oil prices traded higher in Asia and down in Europe and opened in New York at the low for the session.

USDCAD traded within .0020 points either side of 1.3100 with a negative bias which proved fortuitous after the inflation data.

US Michigan Consumer Sentiment data for February is the only US data due.

Overnight Ranges

USDCAD Technical outlook:

The intraday USDCAD technicals flipped to bearish on Thursday with the break below 1.3130, which was the uptrend line from February 16. The target is 1.3000.  Longer term, the break of the January downtrend at 1.3110 on February 20., suggests that the intraday moves are merely consolidation prior to the uptrend resuming.  For today, USDCAD support is at 1.3050, 1.3020. and 1.2990. Resistance is at 1.3110 and 1.3140

Today’s Range 1.3040-1.3120

Chart: USDCAD 30 minute

Source: Saxo Bank

MEXICO  

The intraday USDMXN technicals are bearish while prices are below 20.2100 with minor support seen at 19.5865, targeting further losses to 19.5200, representing prior resistance and support.

Chart: USDMXN daily

Source: Saxo Bank