USDCAD Range 1.3235-1.3315 September 30, 2015
Canadian Retail Sales posted a 0.5% gain, ex-auto, 0.8% which in light of recent events is reasonably good data. In fact, economists at BMO Bank of Montreal suggest that today’s data will lead to a 0.2% gain in GDP this month. Be that as it may, FX traders weren’t enamoured with the news and bought USDCAD. Once again, the rally stalled just above 1.3300. Perhaps steady WTI prices (currently $46.65/bbl) are making USDCAD bulls a tad nervous.
ECB President, Mario Draghi’s highly anticipated speech this morning, failed to deliver the doveish remarks that were expected. Instead, although he admits inflation will be close to zero, he expects it to rise before year end. Sentiment is that any hopes of additional stimulus in October is off the table.
Overnight, Jittery markets got jittier (is than even a word?) following another disappointing piece of data from China. The Caixin PMI index dropped to 47.0 (forecast 47. 5) which spanked Asian equity markets and undermined Aussie and Kiwi. Japan is still on vacation.
Europe had a better day than yesterday, except for Volkswagen. The Markit Eurozone and German PMI’s were in-line with expectations.
USDCAD is in a steep uptrend above 1.3210 with the break above 1.3230 suggesting further gains to 1.3300-50. A break below 1.3210 will lead to 1.3170 and then 1.3130.
Today’s Range 1.3240-1.3310
Chart: USDCAD 4 hour