June 26, 2024
- Biden/Trump debate-Incumbent vs convicted felon
- JPY sinking to 1986 levels.
- US dollar opens mixed after quiet session.
FX at a Glance
Source: IFXA/RP
USDCAD open 1.3683, overnight range 1.3678-1.3713, close 1.3703
USDCAD is drifting aimlessly in a well defined 1.3630-1.3730 range as traders digest contrasting Bank of Canada and Fed monetary policy outlooks. The BoC is expected to cut rates again, although the latest inflation data, has downgraded the odds for a July move. Meanwhile, recent comments from Fed officials suggest the first Fed rate cut may not occur until 2025.
WTI oil prices are steady in a 80.52-81.67 range and are trading at 81.22 in NY. That is rather impressive as the EIA reported that weekly crude supplies increased by 3.6 million barrels last week and the US dollar has a bid.
The Canadian economic calendar is empty.
USDCAD Technicals
The intraday technicals continue to bounce erratically but with a mildly bearish short term bias. The June downtrend remains intact while prices are below the 1.3720-30 zone. A break above 1.3730 negates the downward pressure and will shift the focus 1.3850.
The longer term technicals are bullish with the January 2024 uptrend line intact above 1.3610 with a cluster of moving average support also in the area.
For today USDCAD support is at 1.3650 and 1.3620. Resistance is at 1.3720 and 1.3750. Today’s range is 1.3640-1.3720.
Chart: USDCAD daily
Source: DailyFX
What’Chu Talkin’ ‘Bout, Willis?
That question was asked by Arnold Jackson on “Diff’rent Strokes” which first aired in 1978, ran until 1986, and lives forever in reruns. Tonight, the same question will be asked of President Biden and Convicted Felon Donald Trump. The debate is crucial to the future of the US. One man will try to convince Americans that dementia is no reason for not voting Democrat. The other will regale the audience with tales of woe and argue that an electronic monitoring device attached to his ankle will not prevent an effective stewardship of the government. For Americans, it is “Lose-Lose.”
Lots of Data-Little Interest.
US weekly jobless claims were 233,000 compared to the forecast of 236,000, a tad less than last week’s 238,000 result. Q1 GDP was unchanged at 1.4%. Durable Goods Orders rose 0.1% as expected but he April result was revised down to 0.6% from 0.7%. Pending Home Sales, and Wholesale inventories data won’t spark much trading interest ahead of tomorrow’s PCE-Price index report.
EURUSD
EURUSD is at the top of its 1.0677-1.0702 range despite a slightly weaker German GfK Consumer Confidence Survey (actual -21.8, vs forecast -18.9, previous -21). Prices were also underpinned after Sweden’s Riksbank left rates unchanged at 3.75%. Policymakers hinted at future rate cuts with the statement noting “The Executive Board considers that monetary policy should be adjusted gradually.”
GBPUSD
GBPUSD found a bottom at 1.2613 in Asia, then inched up to 1.2654 in early NY trading. The UK economic calendar is empty. The BoE’s Financial Stability report warned that “investors in financial markets are continuing to expect the economy to recover and inflation to fall. They are placing less weight on risks, such as geopolitical developments or continued high inflation, that might cause weaker growth or interest rates to stay higher than expected. These risks make it more likely that there could be a sharp correction in asset prices that could ultimately make it more costly and difficult for UK households and businesses to borrow.”
USDJPY
USDJPY traded in a 160.430-160.81 range, levels that were last seen when Elon Musk was still in high school, and Mark Zuckerberg just got out of diapers. The BoJ looks foolish for spending $62 billion to prop up the yen only to find it weaker than it was prior to the intervention. Timid BoJ policymakers that are “all talk and no action” and a fresh hawkish outlook for US interest rates are driving USDJPY higher.
AUDUSD and NZDUSD
AUDUSD has a bit of a bid and is trading at the top of its 0.6640-0.6673 range due to a lingering benefit from yesterday’s robust inflation reading, which opened the door to an RBA rate hike.
NZDUSD bottomed out at 0.6069 in Asia then climbed steadily, reaching 0.6105 in early NY trading. The ANZ Business Outlook Survey showed Business Confidence fell 5 points to 6, which ANZ economists said was meaningful progress on bringing inflation pressures down.
USDMXN
USDMXN traded higher in an 18.2805-18.3505 range overnight. Mexican unemployment rose 2.6% in May, unchanged from April but a tick less than expected. Prices popped to 18.4403 on the news the retreated to 18.3788. Mexico trade deficit became a surplus of $1.991B. Today’s main event is the Banxico monetary policy meeting at 3:00 pm EDT. The central bank is expected to leave interest rates unchanged at 11.00% due to the recent increase in inflation.
FX high, low, open (as of 6:00 am ET)
Source: Investing.com
China Snapshot
PBoC fix: 7.1270 vs exp. 7.2765 (prev. 7.1248).
Sanghai Shenzhen CSI 300 fell 0.75% to 3454.12.
Chart: USDCNY and USDCNH
Source: Investing.com
