March 25, 2024
- Chinese pushes back against falling CNY.
- BoJ warns of intervention risk.
- US dollar opens mixed after quiet session.
FX at a Glance
Source: IFXA/RP
USDCAD Snapshot: open 1.3593-1.3597, overnight range 1.3585-1.3615, close 1.3603
USDCAD is looking rather perky as it continues to flirt with key resistance in the 1.3600-30 area. Traders do not seem to care that Canada Q1 GDP data, due Thursday, will show a 0.4% m/m rebound in the economy. The currency remains at the mercy of broad US dollar sentiment and traders have ignored Friday’s better than expected Retail Sales-Exautos data for January.
WTI oil prices trade in an 80.60-81.42 range as traders continue to grapple with conflicting supply and demand signals and geopolitical tensions.
The Canadian economic calendar is empty.
USD/CAD Technicals
The intraday USDCAD technicals are bullish while trading above 1.3570 and looking for a break above the 1.3615-30 area to extend gains to 1.3710.
The 2024 uptrend line is intact above 1.3460. A break above 1.3630 would shift the focus to 1.3900.
For today, USDCAD support is at 1.3570 and 1.3540. Resistance is at 1.3620 and 1.3660. Today’s range is 1.3540-1.3620.
Chart: USDCAD 4 hour
Source: Investing.com
G-10 FX
It’s a short week for markets.
FX markets got off to a slow start this week and will end the week the same way, thanks to Good Friday holiday’s that will shut down financial markets across the G-10 spectrum.
The Fed continues to send out mixed messages. Thursday, Fed Chair Powell responded to a question about the Fed’s reaction to a higher unemployment rate by hinting that and unexpected weakening in the labour market could warrant a policy response. (rate cut). Later, Atlanta Fed President Raphel Bostic said that “The economy continues to deliver surprises and it continues to be more resilient and more energized than I had forecast or projected and so as a consequence, I’ve sort of re-calibrated when I think it’s appropriate to move.” That meant he now only expects one rate cut in 2024 when he previously expected two.
The all-important US PCE Core PCE data is due Thursday and analysts are concerned about the Fed’s reaction if the results come in on the high side.
It could be a big day for former President Donald Trump. New York State Attorney General Letitia James could start seizing Trump assets to satisfy a $454.0 million judgement if he doesn’t come up with an equivalent bond to cover the debt.
EURUSD
EURUSD is firmer inside a 1.0803-1.0833 range with prices pressured by some concerns that the ECB could follow the Swiss National Bank (SNB) and cut rates earlier than expected. However market pricing suggests an April cut is no on the table. The EURUSD technicals are bullish above 1.0770, which is the uptrend line from the beginning of October. It is a very short week in Europe due to Easter holidays that start on Thursday for Scandinavian and other countries.
GBPUSD
GBPUSD is trading with a bit of a bid in a 1.2591-1.2641 range. Prices are getting a bit of support from the softer US dollar following China’s actions to halt the slide in the yuan. The GBPUSD uptrend from October is intact while prices are above 1.2560.
USDJPY
Traders continue to taunt BoJ and Finance Ministry officials by keeping USDJPY mildly bid in a in a 151.05-151.46 band The Vice Minister of Finance, Masato Kanda, said “The current weakening of the yen is not in line with fundamentals and is clearly driven by speculation. We will take appropriate action against excessive fluctuations, without ruling out any options.”
AUDUSD and NZDUSD
AUDUSD had an uneventful session and drifted in a 0.6510-0.6544 range. NZDUSD consolidated recent losses in a 0.5986-0.6013 range due to the dovish RBNZ tone because of concerns of a slowing economy that raises the risk of a recession.
USDMXN
USDMXN traded in a 16.7210-16.7704 range as traders digested last week’s 25 basis point rate cut by Banxico, which lowered its benchmark rate to 11.00%. The outlook is mixed as inflation continues to exceed expectations while consumer spending is cautious.
FX high, low, open (as of 6:00 am ET)
Source: Investing.com
China Snapshot
PBoC fix: 7.0996 vs exp. 7.2267 (prev. 7.1004)).
Shanghai Shenzhen CSI 300 fell 0.54% to 3525.76
The PBoC set the daily FIX far lower than expected in what is seen as a message to traders that officials do no want to see a weaker yuan.
Chart: USDCNY and USDCNH daily
Source: Investing.com
