The US dollar didn’t get any additional lift from this morning’s data, but it didn’t hurt it either. The US 2nd estimate of Q4 GDP was revised down to 2.5%, as expected.  Chicago PMI and Pending Home Sales data will be over-shadowed by today’s month-end portfolio rebalancing flows.  The large drop in US equity indices in February suggests portfolio managers will be buying US dollar’s for the 1600 GMT fix.

Overnight, FX trading was subdued following the post-Powell testimony US dollar rally. The antipodeans traded sideways than diverged in Europe.  AUDUSD inched higher, and NZDUSD drifted lower.

USDJPY firmed at the open but reversed course after the Bank of Japan reduced its amount of Super-long bond purchases.  USDJPY dropped from 107.51 to 107.01

It was a busy day in Europe, but EURUSD stuck to a 1.2200-40 range. Eurozone February CPI was 1.2%, y/y, as expected but Core CPI was a tad softer at 1.0%, y/y. (forecast 1.0%.  Germany’s unemployment rate stayed at 5.4% and Swiss data was above forecasts.   (KOF Leading Indicators 108.0 vs forecast  106.1)

Sterling edged lower.   The Gfk February Consumer Confidence report was as expected (-10) but worse than January’s -9 reading which added tot the negative GBPUSD sentiment stemming broad US dollar strength.  A headline that said, “EU wants to keep Northern Ireland in EU Customs Union”  sent GBPUSD from 1.3870 to 1.3834 in early New York trading.  Britain is opposed to a border in Ireland.

Global equity indices were down however NY equity futures are pointing to a mixed opening,

Oil prices consolidated yesterday’s losses and had shrugged off a small gain in US crude inventories (API 0.997 m/barrels).

USDCAD was ignored but remained at lofty levels and has a bullish bias.  The Federal Budget did not have any impact on FX

USDCAD Technical outlook

The intraday USDCAD technicals are bullish and looking for a test of 1.2915.  Strong resistance in the 1.2660-1.2720 has been crushed, leaving the door open for addition gains. A break below 1.2720 would argue for 1.26650-1.2780 consolidation.  For today, USDCAD support is at 1.2740 and 1.2720.  Resistance is at 1.2790 and 1.2830.

Today’s Range 1.2740-1.2830