The Asia Pacific Economic Cooperation (APEC) summit ended without a commitment to economic cooperation. The group did not issue a joint statement. China President Xi Jinping said, “Unilateralism and protectionism will not solve problems but add uncertainty to the world economy.” US Vice President Mike Pence retorted: “China has taken advantage of the United States for many, many years and those days are over.” That exchange dashed hopes for a trade break-through at the Argentina G-20 summit at the end of the month.
Risk aversion concerns ripple around the market. The US dollar was sold against the Japanese yen and Swiss franc. The commodity currency bloc lost ground, and EURUSD was unchanged at this morning’s US open.
GBPUSD is a tad higher, but UK politics has it trapped in another world.UK Prime Minister Theresa remains under threat of a “no-confidence” vote over her Brexit deal which is undermining Sterling. EURUSD is supported by bullish technicals and the perception that the single currency will rise in 2019 because of Eurozone tightening.
WTI is trading just above its overnight low of $56.53/barrel. Price support from talk that Saudi Arabia, Russia, and Opec will announce production cuts on December 6 is undermined by fears of a global economic slowdown and rising crude supply.
The Canadian dollar is consolidating last week’s gains in a 1.3140-1.3190 band supported by the belief that the Bank of Canada will raise rates in December. Traders are also hoping for some fiscal stimulus from the Federal Budget Update, due November 21. There isn’t any top-tier US or Canadian economic data available today and this week’s US holiday may put a damper on trading.
The intraday USDCAD technicals are bullish above 1.3120 which is the uptrend line from October 2. It is also guarding the 38.2% Fibonacci retracement level of the October/November range at 1.3088. A break above 1.3180 suggests a retest of 1.3210 and it is broken, 1.3260. A break below 1.3120 targets 1.3080.
Today’s Range 1.3140-1.3210