Overnight Range 1.3325-1.3382  

Statistic Canada reported that Canada Q4 GDP rose 2.6% quarter over quarter, handily beating the forecast for a 2.0% gain. The month over month December gain was 0.3%,  which was as expected. Canada’s Current Account deficit narrowed to $10.7 billion in the fourth quarter.

The data helped to relieve some of the upward pressure on USDCAD which was probing resistance in the 1.3380 area prior to the release.  However, the decline has been fairly shallow.  That’s likely because yesterday’s Bank of Canada statement and it’s focus on the negatives, overshadowed the Q4 data.

Oil prices extended yesterday’s losses fueled by the EIA report of record US Crude inventories.  WTI dropped from $53.82 to $52.75/b. where they currently sit.

Euro traders ignored domestic data. Eurozone inflation came out at 2.0%, y/y in February, a tad higher than the 1.8% level seen in January.  Eurozone unemployment was 9.6%.  Neither release had much of an impact on trading. EURUSD inched lower throughout the session but stayed well-above support at 1.0455.

Sterling kept its negative bias since dropping below support at 1.2380 on Monday but was stuck in a narrow 1.2260-1.2300 band.

Late yesterday, Fed Governor Lael Brainard, appeared to shrug off her Dove cloak to join the ranks of the Hawks.  She said “Assuming continued progress, it will likely be appropriate soon to remove additional accommodation, continuing on a gradual path,”

Yen traders were all over the Brainard comments.  The increased probability of a rate hike on March 15 lifted USDJPY from 113.68 to 114.32 by the New York open.

Brainard’s comments knocked the antipodeans for a loop in early trading AUDUSD dropped from 0.7680 to 0.7541. It bounced back to 0.7660 and then got whacked again when Trade data missed forecasts. (Actual $1.3 billion vs. forecast $3.8 b). AUDUSD dropped to 0.7610 by the time New York opened Kiwi followed Aussie lower.

Overnight Ranges

Close

 Open  

1-Mar

 1-Mar High

Low
USDCAD 1.3337 1.3366 1.3374 1.3325
EURUSD 1.0545 1.0527 1.0550 1.0522
USDJPY 113.64 114.22 114.32 113.69
GBPUSD 1.2284 1.2278 1.2300 1.2261
USDCHF 1.0090 1.0107 1.0116 1.0086
AUDUSD 0.7676 0.7620 0.7680 0.7614
NZDUSD 0.7146 0.7106 0.7148 0.7099
USDMXN 20.0822 20.0225 20.1615 19.9798
WTI   53.75 53.35 54.28 53.80
 

 

USDCAD Technical outlook:

The USDCAD technicals are bullish.  A break above 1.3380 will extend gains to the 1.3440-60 area.  Above 1.3460, it is clear sailing to 1.3600. A move below 1.3250 would lead back to 1.3000-1.3380 consolidation.  For today, USDCAD support is at 1.3330 and 1.3280.  Resistance is at 1.3380, 1.3410 and 1.3460

Today’s Range 1.3330-1.3410

Chart: USDCAD 30 minutes

Source: Saxo Bank

USDMXN

USDMXN continues to decline, undermined by the Banico FX swaps intervention tool and less inflammatory rhetoric from President Trump, However, it is still vulnerable to a more hawkish than expected FOMC rate outlook.   The technicals are bearish while prices are below 20.3800 and looking for a break below support at 19.5600 to extend losses further

Chart: USDMXN 4 hours

Source: Saxo Bank