US weekly jobless claims beats forecasts, Q1 GDP misses
Biden reportedly announcing $6 trillion budget Friday
USD opens with gains compared to Wednesday’s open
USDCAD open 1.2109-13, Overnight range 1.2081-1.2140, Previous close 1.2125
FX at a Glance
FX Recap and Outlook
FX traders were cautious ahead of this morning’s US data dump. Their worst fears were not met. Instead, it was a mixed bag of data, which was mostly below forecasts.
Q1 GDP was unchanged at 6.4% q/q but a tick below the 6.5% q/q forecast. Durable Goods Orders were disappointing. New Orders fell 1.3%, rather than rise 0.7% as forecast, which was the first decrease in eleven months. However, any disappointment from the weak data was offset by better than expected weekly jobless claims numbers (actual 404,000 vs forecast 425,000).
The US dollar barely budged on the results.
European equity indexes are also mixed The UK FTSE 100 and the German Dax are modestly lower, while the French CAC index is higher. S&P Futures recouped overnight losses and Wall Street is poised to open in positive territory.
Fed Vice Chairman Richard Quarles sparked some taper concerns late yesterday after he said “If my expectations about economic growth, employment, and inflation over the coming months are borne out, it will become important for the FOMC to begin discussing our plans to adjust the pace of asset purchases at upcoming meetings.”
EURUSD traded in a 1.2176-1.2214 range with the low seen in Asia in reaction to Quarles comments. ECB policymaker Pablo de Cos said inflation increases would be transitory, continuing the trend of dovish policymaker comments. German GfK consumer confidence was -7.0 missing the forecast of -5.2. EURUSD is stuck in a 1.2150-1.2250 range.
GBPUSD traded choppily but with a bit of a bid as prices climbed from 1.4093 to 1.4138, where they sit in early NY trading. Sales of EURGBP gave GBPUSD a lift. UK traders are looking ahead to a long weekend, thanks to the May 31 Spring Bank Holiday. GBPUSD technicals are bearish below the 1.4140-60 area.
USDJPY continued to put traders and volatility to sleep. Prices drifted in a 109.05-109.20 range, in part due to indecision about the direction of US treasury yields.
AUDUSD and NZDUSD tracked broad US dollar movements. AUDUSD got a little support from better than expected capital expenditure data, which rose 6.3% q/q compared to the 2.0% forecast. RBNZ Governor Orr said that they are willing to cut interest rates if needed, which appeared to be a lame attempt at moderating enthusiasm from the higher OCR projections released on Wednesday.
USDCAD consolidated yesterdays gains in a 1.2097-1.2140 range. Prices are underpinned by new concerns around US/Canada trade, while steady to firm WTI oil prices are ignored. The bearish USDCAD story based on hopes for a vaccine-fueled economic rebound and firm commodity prices is stale and reflected in current levels. The currency pair needs fresh incentives to plow below support in 1.2040-50 area.
USDCAD Technical Outlook
The intraday USDCAD technicals are bullish above 1.2070, looking for a break above 1.2150 to extend gains to 1.2210, then 1.2250. Thursday’s break above 1.2070 snapped the downtrend that was intact since April 22, and suggests the currency pair will consolidate in a 1.2050-1.2150 range for the short term.
Chart USDCAD 4 hour
Source: Saxo Bank
FX open, high, low, previous close
Source: Saxo Bank