USDCAD New York Open 1.3322-26 Overnight Range 1.3304-1.3345
The US dollar is a tad softer to start the week. The FOMC meeting is Wednesday and traders are expecting a dovish policy statement. UK politics and Brexit are still front and center in Europe and will completely overshadow the Bank of England policy meeting on Thursday.
The US dollar opened in New York with small losses against the major G-10 currencies except for the British pound which posted a small gain. USDJPY was unchanged from Friday’s close.
USDCAD is supported by string of weaker than expected, but second tier, economic reports from last week and entrenched expectations that Canadian interest rates will stay unchanged for the rest of 2019, with the market suggesting the odds for a rate cut are about 50%.
EURUSD inched higher, rising from 1.1318 to 1.1351 in New York today, supported by a widening of the Eurozone trade surplus and expectations that the FOMC will downgrade 2019 interest rate forecasts.
GBPUSD continues to be underpinned by the diminished risk of a “no-deal” Brexit. There is talk that Prime Minister Theresa May would put her Brexit plan up for a third vote this week in hopes that the fear of a no-deal will overcome MP’s distaste for her plan.
USDJPY is weighed down by soft US Treasury yields and dovish Fed concerns. That dovish Fed outlook contributed to a rise in AUDUSD and NZDUSD.
The South China Morning Post claims the Donald Trump/Xi Jinping meeting that was pushed out to April from March will be pushed into June because a trade deal will not be finalized until then. Both sides are stuck on how an agreement can be enforced.
It is likely to be a quiet day in FX land. There isn’t any economic data of note, and Wednesday’s FOMC meeting provides perfect excuses to sit on the sidelines.
The intraday USDCAD technicals are bullish after failing to break below support in the 1.3270-80 area on Friday, and which has contained downside moves since March 4. A break above resistance in the 1.3360-80 area, targets gains to 1.3460 and then 1.3550. Weaker than expected CPI and Retail Sales data on Friday could be the catalyst for a 1.3550 probe. For today, USDCAD support is at 1.3290 and 1.3250. Resistance is at 1.3350 and 1.3390
Today’s Range 1.3290-1.3360 ff
