The US dollar recovered, somewhat, from yesterday afternoon and Asia losses stemming from President Trump’s saying “I think our dollar is getting too strong,” in an interview with the Wall Street Journal.
This morning’s US Jobless claims data was a tad stronger than expected (Actual 234,000 vs. forecast 245,000) but the good news was offset by modest declines in PPI data.
The Canadian dollar got a minor boost with news of a 0.4% jump in the New Housing Price Index. Yesterday, USDCAD broke below major support in the 1.3260-90 zone when the Bank of Canada shifted its monetary policy outlook from doveish to “cautiously neutral”. Trump’s currency comments greased the skids and the break below 1.3250 has made the owners of long USDCAD positions nervous.
The Loonie is also being supported by firm oil prices. WTI inched off the closing low of $52.70 and is sitting at $53.28/barrel. Prices are underpinned by an IEA report suggesting that the oil market was close to balance.
Sterling rallied from 1.2488 to 1.2525 after the Trump comments and extended the move in Asia, touching 1.2572. However, profit taking ahead of the long Easter weekend has pushed GBPUSD back to 1.2520.
EURUSD recouped some of its post-Trump gains during the European session. The single currency has declined from a European peak of 1.0676 to 1.0630.
In Asia, AUDUSD rallied from 0.7525 to 0.7595, powered by a much stronger than expected employment report, robust China trade data and the Trump comments.
The New Zealand dollar was no slouch either. NZDUSD rose from 0.6969 to 0.7006. Both currency pairs managed to keep most of their gains by the time New York opened.
USDJPY dropped to a low of 108.73 and then bounced back to 109.23. Yen remains in demand because of geopolitical concerns and President Trumps comments.
The long Easter weekend holidays across many parts of the globe may lead to a pre-weekend bout of US dollar demand on profit taking. The US is open on Good Friday and Retail Sales and CPI reports are released. Most other major markets are closed.
USDCAD Technical outlook:
The intraday USDCAD technicals are bearish and looking for a test of support at 1.3150. The uptrend line from the February 15 low of 1.3005 was broken with the drop below 1.3320 on April 10. The subsequent loss of support in the 1.3260-90 area suggests further downside. For today, USDCAD support is at 1.3220 and 1.3180. Resistance is at 1.3260 and 1.3290
Today’s Range 1.3210-1.3270
Chart USD 4 hour
Source: Saxo Bank