The US dollar added to yesterday’s gains against the G10 currencies although the ranges were fairly narrow. The dollar has stayed bid on anticipation that today’s release of the FOMC minutes will reveal a hawkish shift due to rising inflation.  You will recall that the January 31 statement was considered “upbeat” and the minutes shouldn’t change that view.

In Europe, UK employment data disappointed and sterling dipped.  The unemployment rate inched higher to 4.4% from 4.3%, previously.  Average earnings ticked higher to 2.5% from 2.4%, although that result was expected.  GBPUSD accelerated its slide from 1.3996, dropping to 1.3908.  A letter to Theresa May from 67 MP’s has raised the risk of a”hard Brexit.”

EURUSD traded in a narrow range with a negative bias.  This morning’s Eurozone Flash PMI report was worse than expected which added to the negative sentiment.

USDJPY climbed steadily in Asia, rising from 107.29 to 107.89 but retraced nearly all of the move in Europe, due to a bout of profit-taking.  Japanese officials continue to make noises about the currency.  (recent JPY moves one-sided)

AUDUSD traders were not happy with the details of the Wage Price data (0.6% vs forecast 0.5%) and sold the currency. AUDUSD dropped from 0.7901 to 0.7842.  NZDUSD bounced about in a narrow range and managed to open in New York with a tiny gain.

Oil prices edged lower.  Traders are concerned about rising US inventories and production.  WTI  traded in a $60.94.-$61.67 range.

USDCAD is probing resistance in the 1.2660-1.2680 zone, supported by broad US dollar strength and the belief that CAD/US interest rate differentials will widen. Nafta concerns are a lingering issue, and if Prime Minister Trudeau’s performance in India can be used as a guide, Canadians should be worried.  Trudeau announced Canada and India signed 66 deals worth $1 billion dollars.  The truth is that Canada signed 66 deals that cost Canada $750 million dollars.

Bank of England Governor Mark Carney’s speech at 1415  GMT   will keep GBPUSD traders jumpy due to Brexit concerns and the interest rate outlook. US data includes Markit Manufacturing PMI and Existing Home Sales. Neither release should have much impact on FX markets.

USDCAD Technical outlook:

USDCAD technicals are bullish.  USDCAD is pushing above the first layer of resistance at 1.2860.  If 1.2880 gives way, 1.2820 will be in play, although there is resistance in the 1.2730-50 zone.  A break below 1.2620 would lead to a retest of 1.2550.  For today, USDCAD support is at 1.2620 and 1.2580.  Resistance is at 1.2680 and 1.2710.

Today’s Range 1.2630-1.2730