The US dollar opened in New York on firm footing. It has shrugged off Friday’s weak payrolls data, new Trump tariff threats against China and Wall Street weakness.
President Trump appeared to make nice to China on Sunday when he tweeted about his “best friend forever” relationship with China President Xi Jinping. Later National Economic Council Director Larry Kudlow said on Fox News “I don’t think there is any trade war in sight.”
That wasn’t all. North Korea is reportedly willing to talk nukes with the US.
The US dollar may have gained, but the moves were not that impressive. EURUSD traded in a 1.2261-1.2286 range. Weaker than expected Sentix Investor Confidence (April 19.6 vs March 24.0) and soft German Trade data, limited Euro gains.
GBPUSD dropped from a session high peak of 1.4116 down to 1.4080 on the back of the mild bid to the greenback. Sterling continues to be supported by the outlook for UK interest rate hikes and lower Brexit risks.
USDJPY traded quietly in a 106.80-107.14 range. Reutters reported that Japan Prime Minister Abe told reappointed Bank of Japan Governor Haruhiko Kuroda to use all tools necessary to achieve 2% inflation.
AUDUSD got a short-lived lift after March AiG Performance of Construction Index posted 57.2, up from 56.0 in February. However, price action was confined to a narrow 0.7661-0.7696 range.
Oil prices ticked higher on rising tensions between Syria and the US, but China/US trade war concerns limited the gains. WTI traded in a $62.01-$62.41 range.
USDCAD rallied, rising from 1.2764 to 1.2817 in early New York and then retreating to 1.2794. Broad US dollar strength was offset but rising oil prices, improved tone to Nafta talks and Friday’s robust Canadian employment report.
FX markets should remain range bound today. There isn’t any US, or Canadian economic data of note Asia and European equity markets are mostly higher, and US equity futures point to a higher opening on Wall Street.
USDCAD Technical Outlook
The USDCAD rally from 1.2763 stalled at 1.2818, just below the minor downtrend line from April 3, which suggests the move was just a correction. If so, it would be confirmed on a move below 1.2780. Longer term, the USDCAD downtrend is intact while prices are below 1.2870, looking for 1.2740 to crumble to extend losses to 1.2650. For today, USDCAD support is at 1.2780 and 1.2740. Resistance is at 1.2820 and 1.2860.
Today’s Range: 1.2740-1.2820