Source: Wikimedia/IFXA Ltd
Source: IFXA Ltd/RP
FX Recap and Outlook: USDCAD popped to the mid 1.2170’s following the release of domestic GDP data, but the move was unwound just as quick. The data was mixed to negative. Q4 GDP grew 9.6% q/q, at tad better than expected. December GDP rose 0.1% compared to the forecast of a 0.3% increase, while 2020 GDP fell 5.4% y/y, the worst on record. Nevertheless, the data is stale and traders are focused on external developments.
Asia equity markets gave up early gains and closed with losses thanks to comments by a Chinese banking regulator official opining about “large bubbles” in the domestic property sector and in foreign markets. European equity markets were also choppy but managed to turn early losses into gains. S&P 500 futures are modestly lower.
EURUSD traded in a 1.1993-1.2050 range overnight, finding the bottom in early European trading and then grinding higher into the NY open. Germany is reportedly going to ask people not to travel over the Easter holiday’s and officials are considering extending lockdown restrictions until March 28. ECB policymaker Luis de Guindos said the ECB would counter undesirable yield moves. “We have room for maneuver, and we have ammunition.” German Retail Sales and employment reports were a tad weaker than expected as was headline Eurozone CPI. (actual 0.9% y/y vs forecast 1.0% y/y).
GBPUSD slid from 1.3930 in Asia to 1.3860 just before NY opened and then bounced to 1.3913. Prices continued to be weighed after yesterday’s comments by Bank of England MPC member David Ramsden reminded traders that negative interest rates were in the took box.
Traders were also defensive ahead of tomorrow’s UK budget.
USDJPY topped out at 106.95 in NY trading, underpinned by steady to firm 10-year Treasury yields, which chopped about in a 1.40%-1.446% range.
AUDUSD traders were not too bothered by the RBA monetary policy statement.
The RBA left interest rates and policy unchanged as expected. AUDUSD chopped about in a 0.7738-0.7775 range until just before NY opened when prices surged to 0.7805. NZDUSD followed AUDUSD higher.
WTI oil prices slumped, falling from $62.70 yesterday to $59.48 overnight due to a negative sentiment ahead of the Opec and Russia meeting Thursday, and shifting risk sentiment. Prices bounced back to $60.77 in NY trading.
USDCAD rode a rollercoaster. It dropped from 1.2695 yesterday to 1.2638, then climbed to 1.2697 overnight before dropping to 1.2640 just before NY opened. The currency pair is riding waves of shifting risk sentiment and are awaiting the Opec meeting
There are not any US economic reports of note on tap.
USDCAD Technicals: The USDCAD technicals are modestly bullish above 1.2640, looking for a break above 1.02690 to extend gains to the 1.2730-40 area which represents the April 2020 and November downtrend lines. A break below 1.2640 shifts the focus to 1.2550. For today, USDCAD support is at 1.2640 and 1.2580. Resistance is at 1.2690 and 1.2730. Todays Range 1.2590-1.2690
Chart: USDCAD daily
Source: Saxo Bank
FX open (6:00 am EDT) High, Low, and previous close
Source: Saxo Bank