Overnight Range 1.3423-1.3535   

USDCAD dropped quickly in early New York trading due to a spike higher in oil prices.  WTI rose from $45.64 to $46.68 on news that “Iran was optimistic; for an Opec deal. USDCAD dropped to 1.3419 from 1.3497 on the news.

Overnight, the Canadian dollar traded erratically in a thin market. USDCAD was a tad soft at the Asia open but rallied, rising from 1.3488 to 1.3535. That move was short lived; USDCAD plunged to 1.3460 and then traded sideways until Europe opened. General US dollar sentiment, thin markets and oil price swings were behind the move.

It was a sloppy FX trading session in Asia for the other majors.  The US dollar was sold across the board on a combination of lower US Treasury yields, rising Asia equity indices and a bump in oil prices. USDJPY dropped from 113.10 to 111.35 before bouncing.  Aussie and Kiwi rose on firmer commodity prices and speculation of an Opec agreement on November 30.  Profit-taking in relatively thin markets exacerbated the move.

However, the dollar sell-off stalled well before Europe opened and the greenback started to claw back some its losses.

European traders saw the world differently and started their day buying US dollar’s. EURUSD retraced almost all of Asia’s losses by the New York open. The USDJPY rally was a tad more sluggish.

Sterling’s price action has been rather dramatic. GBPUSD rose from 1.2445 to 1.2530 in early trading. That move ran out of steam and Sterling edged lower. When the Organization for Economic Cooperation and Development (OECD) warned that business investment in the UK will decline sharply due to Brexit, Sterling selling intensified.  GBPUSD hit 1.2402 by the start of the New York session.

Oil traders are focused on Opec meetings in Vienna, hoping for a production cap/cut deal to be announced on Wednesday.  WTI rebounded from the Asia low of $45.07 to $46.24 in Europe but have since retreated

Asia equity indices were modestly higher except for the Nikkei which shed 0.13% and Australia’s ASX 200 which was down 0.79%.  European indices are all in the red as are US equity futures.

The Organization for Economic Cooperation and Development (OECD) has bumped its global GDP forecast for 2017 to 3.3% from 3.2%. Call it the Trump Bump.

European Central Bank President Mario Draghi’s speech today will be closely watched for clues as to policy initiatives at the December 8 meeting or what, if any, concerns he has about next weekend’s Italian referendum.  There isn’t anything in the way of key US or Canadian data today leaving traders to monitor oil price moves.

USDCAD technical outlook

The intraday USDCAD technicals are bearish with the break below e 1.3460 and looking for a break of 1.3420 to extend losses to 1.3360.  A break above 1.3520 would negate the downtrend and target 1.3580.  For today, USDCAD support is at 1.3420 and 1.3390.  Resistance is at 1.3470 and 1.3505.

Today’s Range 1.3390-1.3470