Eurozone economic data isn’t doing the Canadian dollar any favours, or the rest of the G-10 major currencies, either. Eurozone Q3 GDP missed forecasts, rising 0.2% q/q rather than the 0.4% expected. Adding to the misery, the Economic Sentiment Indicator, (Actual 109.8 vs forecast 110.0) and Business Climate (Actual 1.01 vs forecast 1.14) missed estimates. Consumer Confidence was unchanged at -2.7%. EURUSD dropped from 1.1386 to 1.1351, on the news.
Bearish EURUSD technicals, German political uncertainty and the ongoing EU/Italy budget debate are weighing on the currency.
GBPUSD didn’t get any benefit from yesterday’s UK budget update. Chancellor of the Exchequer Philip Hammond’s warning that a new budget would be needed in the event of a “no-deal” Brexit undermined the currency as well. GBPUSD is trading at the bottom of its 1.2751-1.2811 range.
USDJPY caught a bid, rising from 112.32 to 112.85 when US Treasury yields soared. The 10-year US Treasury yield rose from 3.079% yesterday afternoon to 3.121% in Europe and opened in New York at 3.119%.
Oil prices dropped again overnight, falling from $67, undermined by fresh reports that Saudi Arabia and Russia would increase crude production. Traders are also concerned that the API and EIA will report another build in US crude stockpiles.
USDCAD has a bullish bias above 1.3090, supported by broad US dollar strength although topside gains may be tempered by tomorrows GDP report. Bank of Canada Governor Stephen Poloz and Deputy governor Carolyn Wilkins testify before the House Of Commons Standing Committee on Finance today. Their remarks should echo their comments from the Monetary Policy Press conference, last week.
The US Case-Shiller Home Price Index is the only notable economic data today. FX traders will be watching Wall Street Price action. Equity futures point to a positive open this morning.
USDCAD is rangebound within a 1.2960-1.3160 band. The technicals are bullish while prices are above 1.3050, looking for a break above 1.3160 to extend gains to 1.3240 and then 1.3300. For today, USDCAD support is at 1.3110 and 1.3070. Resistance is at 1.3160 and 1.3190.
Today’s Range 1.3090-1.3160