Global equity markets rallied overnight.  Japan’s Nikkei 225 close with a 1.34%, European bourses are higher, albeit only marginally so and US equity futures are pointing to a higher Wall Street open. That’s due to President Trump opining about the March 1 China deadline when tariffs on $200 billion of Chinese imports rise to 25%. He said, “If we’re close to a deal where we think we can make a real deal and it’s going to get done, I could see myself letting that slide for a little while.” Then he said “but generally speaking, I’m not inclined to do that.”

Equity traders apparently only heard the first part of Trump’s comment.  FX traders focused on the qualifier.  The US dollar opened with small gains against EUR, GBP and JPY and was flat against CHF and CAD.  The antipodean currencies rallied.


NZDUSD soared from 0.6729 to 0.6849 when the RBNZ policy statement was not as dovish as expected. AUDUSD got a boost after the Westpac Consumer Confidence index rose 4.3% compared to a drop of 4.7% previously.  USDJPY firmed in line with an uptick in US Treasury yields and fresh hopes for a US/China trade deal


GBPUSD peaked at 1.2921 in Asia and slipped steadily into the New York open.  A slew of weaker than expected economic reports including January CPI falling to 1.8% from 2.1% in December didn’t help.  Brexit is coming down to the wire.  UK PM Theresa May is being accused of delaying the final vote until just before the March 31 deadline.  The EU maintains that they have no interest in changing May’s original deal (which was rejected by the UK parliament) but EU officials are continuing to negotiate with Brits.  Prices soared to 1.2957 in  early New York trading after a tweet that UK Conservative and Labour ministers were meeting saying it was the first time the two sides were engaging on a detail and stumbling blocks.


EURUSD couldn’t extend yesterday’s gains above 1.1340 and it opened in New York at sessions lows.


Oil prices got another boost from Saudi Arabia.  WTI rose to $53.78 overnight after the Saudi’s said that they would cut production by 500,000 barrels/day in March.


USDCAD dropped from 1.3236 to 1.3198 on the back of higher oil prices and gains in AUDUSD and NZDUSD.  The move reversed in Europe as USDCAD tracked EURUSD moves.  Weaker than expected Eurozone December Industrial Production data (Actual -0.9% vs forecast -0.4%) didn’t help sentiment.

US January CPI (forecast 0.1%) is on tap this morning.  The data is expected to be weak because of low energy prices.  There isn’t any Canadian data available.

The intraday USDCAD technicals are bullish while prices are above 1.3190, looking for a break of resistance at 1.3330 to extend gains to 1.3380. A break above the topside would target 1.3550. For today, USDCAD support is at 1.3190 and 1.3160.  Resistance is at 1.3260 and 1.3330.  Today’s Range 1.3190-1.3260