The US dollar has scraped out additional gains in early New York trading although the moves lack conviction. A lack of actionable, top-tier data is to blame. The negative effects of the Trump healthcare bill failure are fading fast while a herd of Fed speakers keep the focus on FOMC monetary policy. That was the story overnight and that will be the story today.
Sterling hogged the spotlight. Theresa May fired off a signed letter to the European Union formally invoking Article 50. GBPUSD extended Tuesday’s losses in Asia and dropped from 1.2461 to 1.2379. The Article 50 story was pre-announced which makes the GBPUSD sell-off a tad perplexing. GBPUSD recouped the losses during the European session but couldn’t sustain the move. GBPUSD is now trading at 1.2411. (6:00 am PST)
USDJPY ticked higher in Asia trading, extending gains made earlier, in New York, as concerns over Trumps healthcare bill failure faded and US data highlighted a strong economy. The rally was capped at 111.31 and USDJPY dropped to 111.03 at the New York open.
EURUSD traded in a 1.0778-1.0825 range, inching higher in Asia and then back down in Europe. European equity indices are higher and the FTSE is unchanged
Oil traders ignored yesterday’s end of day American Petroleum Institute report of a 1.9-million-barrel increase in crude inventories. WTI rose from $48.31 to $48.82 as traders preferred to focus on a supply disruption from Libya and hopes that Opec extends production cuts. WTI gave back the overnight gains in New York trading
USDCAD drifted lower in a narrow range overnight and opened in New York at the low. It has since drifted higher due to negative sentiment from yesterday’s speech by Bank of Canada Governor Stephen Poloz. He continued to stress the risks to the domestic economy while downplaying strong economic reports. The currency is also closely following oil price movements.
FX traders will be hard pressed to find fresh information and insight today. FOMC policy comments will be covered by Federal Reserve Bank of Boston President Eric Rosengren and San Francisco President John Williams who will regale markets with their economic perspectives. That suggests we are in for some choppy trading inside narrow ranges today.
USDCAD Technical outlook:
The USDCAD technical picture is unchanged from Tuesday. They are bullish and looking for a break above 1.3405 to extend gains to 1.3535. A break below 1.3320 will lead down to the 1.3240-60 area. For today, USDCAD support is at 1.3420 and 1.3380. Resistance is at 1.3405 and 1.3430
Today’s Range 1.3320-1.3390
Chart: USDCAD and WTI Chart 30 minute