The clown circus that is the President Trump administration put another act into the center ring. The firing of FBI Director James Comey, added to the failure of Trumps to even get a vote on his healthcare bill, inflammatory trade rhetoric and questions over Trump’s relationship with Russia have made traders jumpier than a frog in a French restaurant.  That led to yesterday’s US dollar gains being pare back overnight.

On Tuesday afternoon, the North Korean Ambassador to the UK to reporters at Sky News that NK would launch a sixth nuclear missile test “at its Leaders choosing.” USDJPY dropped from 114.28 to 113.64 on safe have demand and then spent the overnight session consolidating those losses.  It is now trading in the middle of that range with a bullish bias.

9-May 10-May High


USDCAD 1.3728 1.3707 1.3730 1.3689
EURUSD 1.0871 1.0868 1.0897 1.0859
USDJPY 113.93 113.88 114.11 113.64
GBPUSD 1.2933 1.2953 1.2986 1.2933
USDCHF 1.0075 1.0069 1.0074 1.0049
AUDUSD 0.7341 0.7372 0.7373 0.7340
NZDUSD 0.6894 0.6931 0.6929 0.6891
USDMXN 19.1868 19.0750 19.1819 19.0769
WTI   45.95 46.34 46.43 46.04

The broad US dollar weakness gave AUDUSD a reprieve and it rose steadily from 0.7340 to 0.7375 where it sits as of 5:45 am PDT.   NZDUSD rallied from 0.6891 to 0.6925 in the same period.

Mixed China data (PPI and CPI data) was ignored.

EURUSD climbed in Asia, slipped in Europe, and opened in New York, unchanged from Tuesday’s close with traders a little nervous ahead of ECB President Draghi’s speech in the Netherlands. Their concerns that he may shift his rhetoric toward a more hawkish stance proved unjustified.

Mr. Draghi said that “”Incoming data confirm that the cyclical recovery of the euro area economy is becoming increasingly solid and that downside risks have further diminished. Nevertheless, it is too early to declare success. Underlying inflation pressures continue to remain subdued and have yet to show a convincing upward trend.”

Sterling rallied from an Asia low of 1.2933 to 1.2986 by mid-morning in Europe and then suddenly dropped to 1.2945

Oil prices were flat in Asia and ticked higher in Europe.  WTI rose from an overnight low of $46.04 to $46.59/barrel in New York trading supported by yesterday’s API report of a 5.78 million barrel decline in US crude inventories. Overnight, Saudi Arabia notified a couple of Asia refiners that it was cutting their crude allocations, in keeping with the Opec production cuts.

The Canadian dollar was quiet in Asia and choppy in Europe.  USDCAD jumped to 1.3730 in early European trading and then dropped to 1.3689 shortly after.  Traders are torn between the modest improvement in oil prices and the likelihood of a US rate hike.

USDCAD Technical outlook:

The intraday USDCAD technicals are bullish while prices are above the 1.3640-70 area and looking for a move above 1.3780 to extend gains to 1.3850.  A break below 1.3640 would target support at 1.3520.  For today, USDCAD support is 1.3670 and 1.3640.  Resistance is at 1.3730 and 1.3780.

Today’s Range 1.3640-1.3720

Chart: USDCAD 30 minute