The US dollar traded with a firming bias in early New York trading. That bias is being reassessed after some soft economic data. Philadelphia Fed Manufacturing Index was 18.9, well below the 25.0 that was forecast. Intial Jobless claims popped to 249,000 (last week 239,000) which is still a respectable number.The US dollar ticked higher on the news, but only modestly and with a lack of conviction.
The US dollar opened with a modest bid, gaining against the FX majors except for Sterling and the Australian dollar.
There were numerous data releases in the overnight session, beginning with Australia employment numbers. The data was below expectations but still positive. AUDUSD traded in a 0.7572-0.7608 range.
New Zealand politics and soft data continued to undermine NZDUSD which traded in a 0.6847-0.6909 band. It opened at the low this morning.
USDJPY rallied on the back of broad US dollar strength an firm US Treasury yields
The European session was busy. EURUSD bounced between 1.1770-1.1800 until mid-morning in Europe. Eurozone inflation data for October was as expected (CPI Actual 1.4% vs. forecast 1.4%, y/y) but came under pressure due to EURGBP selling. The EURUSD retreat will accelerate on a break of 1.1750.
Sterling dropped from 1.3184 to 1.3135 when UK October Retail Sales data was released (Actual 0.3% vs forecast -0.1%, m/m) Prices subsequently rebounded to 1.3195 by the New York open.BoE governor Carney and two other MPC members are speaking later this morning..
Oil prices were steady above $55.00/barrel with traders looking ahead to the Opec meeting at the end of the month.
USDCAD consolidated yesterdays gains and stayed within a narrow band. USDCAD direction is being driven by US dollar moves.
The US dollar remains vulnerable to disappointment on US tax reform.
USDCAD Technical outlook:
USDCAD broke above 1.2750 yesterday which snapped the downtrend that had been intact since the beginning of November. It is targeting additional gains to 1.2900. Only a move below 1.2690 would negate the top-side pressure. For today, USDCAD support is at 1.2720 and 1.2690. Resistance is at 1.2720 and 1.2830.
Today’s Range 1.2720-1.2790
Chart: USDCAD 4 hour