The US dollar recouped losses in Asia and early European trading, managing to squeeze out small gains by the New York open. Sterling was the exception. It continues to be buoyed by positive Brexit headlines which are squeezing short GBPUSD positions.
FX markets dismissed concerns following US Ambassador to the UN Nikki Haley’s resignation. They did take notice of President Trump’s anti-China ramblings from the Oval Office. Trump repeated his threat to impose tariffs on another $267 billion of Chinese imports, and said: “we’ve cancelled a couple of meetings because I say they’re not ready to make a deal.” A spokesman for China’s Foreign Ministry responded “China’s resolution to protect its own legitimate interests is unwavering. No one should have any illusions about this,”
EURUSD topped out at 1.1512 in Asia and drifted down to the previous closing level by the New York open. The Italian’s are not wavering from their plan to have a budget deficit of 2.4% of GDP. The IMF warned Italy to abide by the EU rules or risk triggering a debt default.
GBPUSD is a tad firmer, but off its best levels after some mixed to weak economic data reports. August GDP missed forecasts for 0.1% growth and was flat. The disappointment was offset by to an upward revision to the July result. Industrial and Manufacturing Production, year over year numbers, were better than predicted.
USDJPY climbed in Europe, supported by mildly higher Treasury yields. AUDUSD could not hang on to gains after WestPac Consumer Confidence rose 1.0 and dropped to 0.7090, where it opened in New York.
Oil Prices are higher. Hurricane Michael is a Category 4 storm, and it has shut Gulf coast crude and natural gas production.
USDCAD is an afterthought for FX traders. Broad US dollar strength is supporting the currency pair while prospects of a hawkish Bank of Canada are limiting gains. Canadian Building Permits data today, won’t do anything for the currency.
Today’s US economic data includes Producers Prices and Wholesale Inventories however traders are looking ahead to Thursday’s inflation numbers.
USDCAD Technical Outlook
The intraday USDCAD technicals are bearish below 1.3000, looking for a break below 1.2920 to target 1.2840. The mild uptrend from October 3 ended with yesterday’s break below 1.2975. A decisive break above 1.3000 would shift the focus to resistance at 1.3070. for today, USDCAD support is at 1.2930 and 1.2870. Resistance is at 1.2990 and 1.3010.
Today’s Range 1.2920-1.2990