The US dollar started today’s New York session close to where it finished it, yesterday. USDJPY buyers became cautious after President Trump suggested that North Korea needs more than sanctions.
It was a busy day in Europe with data and a speech by European Commission President Jean-Claude Juncker. Mr Juncker gave an upbeat outlook for the EU and that it was time to move on from Brexit. He said he wanted to start trade talks with New Zealand and Australia.
EURUSD rose from 1.1966 (Tuesday’s close) to 1.1994 in early Asia and then bounced between those levels, only to open in New York, just above the close. Eurozone Industrial Production was close to forecasts while the employment report was a tad stronger.
Sterling extended its rally in Asia and peaked at 1.3327 as Europe opened. Prices dropped rapidly on profit taking and the UK employment report. Unemployment dropped to a 42 year low of 4.3%, but offsetting that was a drop in average wage prices. GBPUSD fell to 1.3167.
In Asia, President Trump’s comments about North Korea were enough to stall the USDJPY rally at 110.28. Prices bounced inside a 109.91-110.28 range.
Australia Se[ptember Consumer Confidence came in at 2.5% reversing the previous reports 1.2% loss. AUDUSD rose from 0.8010- to 0.8040.
The New Zealand dollar has been choppy due to the pending September 23 election. The latest poll from the New Zealand Herald has the National Party winning 54 seats and Labour getting 53 seats.
Oil traders shrugged off the API report of 6.2 million barrel increase in US crude inventories as “Hurricane noise”. The preferred to focus on Opec’s forecast of rising oil demand and lower production for the balance of 2017. WTI rose from $48.15 to $48.75/b.
Global equity indices are flat to higher except the Hang Seng and FTSE 100 US equity futures point to a weak opening today.
The Canadian dollar continues to consolidate last weeks gains. USDCAD traded in a 1.2138-83 range undermined by firm oil prices, hawkish Canadian interest rate outlook and a soft US dollar.
There is only US Producer Price Index data due today. (forecast August PPI 0.3% vs previous -0.1%, m/m) There isn’t anything from Canada. The US inflation report is due tomorrow which may temper trading enthusiasm.
USDCAD Technical outlook:
USDCAD continues to drift aimlessly inside a 1.2060-1.2180 range which has contained price movements since September 7. A break above 1.2180 will extend gains to 1.2240. A break of that level would lead to 1.2360. Longer term the downtrend from May remains intact with a break of 1.2060 extending losses to 1.1950-1.20000
Today’s Range 1.2110-1.2180
Chart: USDCAD daily
