Overnight Range 1.3115-1.3166
The US dollar wobbled this morning following the release of Retail Sales data and the Producer Price Index for December. Retail Sales were 0.6%, month over month, in December, slightly below the 0.7% consensus forecast but well above November’s 0.2% rise. PPI was a tad higher than expected. The dollar wobbled initially but it is back to where it was prior to the release.
Overnight, the dollar had a mixed session and opened in New York close to yesterday’s close.
Asia FX markets were rangebound. USDJPY climbed from 114.53 to 115.18 and then retraced that move during the European session. EURUSD was lifeless until Europe started. The single currency inched up to 1.0656 from 1.0624. Sterling, which was slapped around by renewed Brexit concerns this week, managed to drift higher, rising from 1.2146 to 1.2230. Sterling’s decline this week, helped push the FTSE100 to hit another record high.
Traders didn’t pay any attention to Fed Chair Janet Yellen’s speech Thursday night in Washington, although she seemed to be leaning toward higher rates. Ms. Yellen said “unemployment has now reached a low level, the labor market is generally strong and wage growth is beginning to pick up. Inflation has moved up from a very low level, and it’s a little bit under our 2 percent objective, but it’s pretty close.”
They also didn’t seem to care about China data releases. China’s December trade surplus narrowed due to a drop in exports and an increase in imports
Since Monday morning, the US dollar has lost ground across the G10 spectrum. That’s because Donald Trump’s Wednesday press conference didn’t deliver anything in the way of details which traders wanted to hear.
Oil prices rallied from $52.27 to $53.15 in Asia but dropped back to the opening level by the New York open. Traders are still concerned about the level of Opec compliance to the agreed upon production cuts.
USDCAD traded quietly. The Loonie is being driven by oil price movements and US dollar sentiment and not any domestic issues. The afternoon session should be quieter than usual as New York traders try to get an early start on the long weekend. Monday is the Martin Luther King holiday in America
USDCAD Technical outlook:
The intraday and short term USDCAD technicals are bearish while prices are below 1.3170 and 1.3260, respectively. A decisive move above 1.3170 would negate the short term downward pressure and suggest additional 1.3100-1.3400 consolidation. A break below 1.3010 opens the door to steeper losses to 1. 2720. For today, USDCAD support is at 1.3110, 1.3080 and 1.3040. Resistance is at 1.31701.3220 and 1.3270
Today’s Range 1.3110-1.3210
Chart: USDCAD hourly