The headline US March Durabale Goods Orders data beat the forecast but the ex-Transportation data was soft. Initial Jobless Claims were a stellar 209,000 and Wholesale Inventories improved. However, the data was overshadowed by the European Central Bank Policy meeting press conference that began when the data was released. Thestatement did not offer any surprises.
Overnight, FX markets were deathly dull. President Trump was quiet, the economic calendar was light, and with the ECB meeting just before lunch-hour in Europe, traders had all the reason in the world to do nothing, and that is what they did.
USDCAD traded quietly with a bullish bias. Prices continue to be supported by divergent Bank of Canada and Fed interest rate policies. The Nafta talks are a wild card. Canada and the US are at odds over the “sun-set” clause, but reports suggest the negotiations are going well. USDCAD would revisit 1.2500 on news of a deal.
US 10-year Treasury yields drifted lower but are still above 3.0% which contributed to the lack of FX price movement.
EURUSD meandered in a tight 1.2157-87 range. The ECB is expected to leave rates unchanged and issue a statement and guidance similar to the March 8 statement. A hawkish surprise would send EURUSD to 1.4250 in a heart-beat.
Sterling ticked higher in Asia, rising from 1.3820 to 1.3947. Weak UK economic data drove GBPUSD to 1.3896 but the move was quickly reversed, and GBPUSD touched 1.3864, supported by pre-ECB dollar selling.
USDJPY, AUDUSD and NZDUSD drifted in narrow ranges with traders awaiting the results of the ECB meeting
Oil prices firmed due to uncertainty around new US sanctions against Iran. WTI rose from $67.97 to $68.44.
USDCAD Technical Outlook
The intraday technicals are bullish above 1.2770. Prices are consolidating inside a 1.2810-1.2890 range. A break above the top will target 1.3050 while a move below 1.2770 would lead to 1.2680.
Today’s Range 1.2810-1.2910