This morning’s ADP National Employment report impressed even the most optimistic forecaster.  ADP reported that private sector employment increased by 263,000 jobs in March, well above the 187,000 estimate.  The US dollar reaction was swift but modest.  EURUSD dropped from 1.0684 to 1.0653 and USDJPY rallied from 110.95 to 111.23. USDCAD bounced within a 1.3380-90 range.

A mess of Markit Services PMI data was released in the Eurozone to not much fanfare. That’s because the German Service PMI data was as expected and the Eurozone data ticked lower. It was a different story in Britain.  UK services PMI rose to 55, beating the 53.5 that was forecast and the news lifted Sterling.  GBPUSD rallied from 1.2425 to 1.2488.

	Close	Open
	4-Apr	5-Apr	High	Low
USDCAD	1.3405	1.3403	1.3406	1.3388
EURUSD	1.0666	1.0667	1.0688	1.0663
USDJPY	110.73	110.87	110.97	110.54
GBPUSD	1.2444	1.2481	1.2488	1.2425
USDCHF	1.0019	1.0030	1.0032	1.0013
AUDUSD	0.7563	0.7569	0.7585	0.7561
NZDUSD	0.6973	0.6968	0.6982	0.6967
USDMXN	18.8300	18.8064	18.8164	18.7647
WTI	51.07	51.61	51.69	51.14

Asia FX was characterized by a mild dose of risk aversion following another North Korea missile launch.  The “little fat kid” (Senator John McCain’s description of the North Korean leader) is taunting China and the US ahead of the meeting between Presidents Jinping and Trump on Thursday.  USDJPY dropped in Asia but the move was reversed in Europe.

The antipodean currencies may as well have been on holiday. AUDUSD and NZDUSD drifted in very narrow ranges.  They opened in New York virtually unchanged from Tuesday’s close.

Oil prices climbed to $51.70 from $51.14, supported by a drop in US crude inventories (as reported by API and the end of Tuesday), expectations that Opec will extend production cuts, a production outage in the North Sea and hopes that today’s EIA report will confirm the API data.

The Canadian dollar was adrift, torn between rising oil prices and broad, bullish US dollar sentiment.

USDCAD Technical outlook:

The intraday USDCAD technicals are bullish while prices are above 1.3370. However, yesterday’s failure to extend gains above resistance in the 1.3440-50 area and USDCAD’s subsequent decline below 1.3020 point to additional 1.3370-1.3350 consolidation.  A break above 1.3360 targets 1.3550 while a move below 1.3370 will lead down to 1.3310.

Today’s Range 1.3370-1.3430

Chart: USDCAD 1 hour

Source: Saxo Bank

USDMXN

Mexico’s central bank raised its benchmark interest rate by 25 bps to 6.5%  on March 30 and USDMXN has traded inside an 18.6300-18.9000 range.  The downtrend from January’s peak is intact while prices are below 19.0000.

Chart USDMXN  4 hour