US and Canadian data releases were close enough to expectations to be a non-event The Initial Jobless Claims four-week average is tracking 230,000. US Import prices were flat while export prices were marginally higher. Easter holidays may have distorted the data,
The US dollar inched higher in a low-key overnight session. An undercurrent of unease rippled through FX markets with traders concerned about how the US and others would respond to Syria’s reported use of chemical weapons. On one side, the US, France and maybe the UK. On the other, Russia and Syria.
The US/China trade spat was another concern, especially after China’s commerce ministry said that “if the US escalates the situation, China will fight back.”
Oil prices stayed close to levels last seen in 2014. Bearish news of higher US crude inventories reported earlier this week was more than offset by rising Middle East tensions.
NZDUSD rallied from 0.7353 to 0.7387 after comments by Deputy Governor John McDermott said that changes to the central bank’s mandate would help inflation targeting. Prices retreated in Europe on the back of broad US dollar gains. Kiwi was the only currency to open in New York higher than where it closed yesterday.
AUDUSD struggled with resistance near major resistance and dropped to 0.7739 from 0.7770. Australia Inflation expectations data was a tad weaker than last month’s report as were Home Loans and Investment Lending.
USDJPY traded sideways in a narrow band until mid-morning in Europe when prices popped to 107.15 from 106.90. Remarks by Bank of Japan Governor Kuroda promising to keep stimulus in place may have supported USDJPY.
EURUSD traded in a 1.2353-77 range until mid-morning in Europe. Soft Eurozone Industrial Production (Actual 2.9% vs forecast 3.8%) triggered a sell-off to 1.2328.
GBPUSD bounced in a 1.4146-96 range due to a mix of data and broad US dollar moves. Sterling remains bullish while prices are above 1.4130.
Asia equity indices closed in the red, but the losses were tiny. European bourses are in positive territory as are US equity futures. President Trump just tweeted: “Never said when an attack on Syria would take place. Could be very soon or not so soon at all! In any event, the United States, under my Administration, has done a great job of ridding the region of ISIS. Where is our “Thank you America?”
That tweet should allay fears that a US-led attack on Syria is imminent.
USDCAD climbed steadily overnight but peaked at 1.2613. Prices have since retreated, undermined by high oil prices, bearish USDCAD technicals and the better tone to Nafta talks
USDCAD Technical Outlook
The intraday USDCAD technicals are bearish while prices are below 1.2605 looking for a break of 1.2550 to extend losses to 1.2460. A break above 1.2620 suggests further upside to 1.2690. for today, USDCAD support is at 1.2550 and 1.2510. Resistance is at 1.2620 and 1.2660.
Today’s Range: 1.2550-1.2620