Range Aug.1 NY Open-6: am Aug.2 1.3040-1.3139
The Canadian dollar is welcoming back Canadian’s from a holiday Monday, only a little worse for wear It closed at 1.3035 on Friday and currently sits at 1.3050. (6:00 am PST) USDCAD climbed steadily on Monday and peaked at 1.3139 in Asia, overnight. Declining oil prices were behind yesterday’s sell-off and a bump in WTI prices contributed to this mornings USDCAD retreat. This mornings US Personal consumption data modestly beat expectations rising 0.4% in June.
Overnight, Asia trading was extra quiet due to a typhoon in Hong Kong. Still, there was a flurry of action in Aussie when the RBA cut rates, surprising about 20% of the market. AUDUSD dropped from 0.7548 to 0.7487 before reversing course and hitting .7580 as New York started. USDJPY dropped to 101.43 on news that the Japan Cabinet had approved in ¥13.5 trillion fiscal measures.
GBPUSD was rather wonky. Yesterday, soft consumer confidence and weak factory orders had traders hitting bids down to 1.3160. Today, the were paying offers up to 1.3255 supported by better than expected PMI construction data and general US dollar weakness.
Overnight, Dallas Federal Reserve President, Robert Kaplan said in a speech that “September is on the table” while urging caution. FX traders ignored those remarks.
The US dollar has drifted lower since New York walked in, continuing the theme seen in Europe. Friday’s weaker than expected US GDP data and yesterday’s soft construction spending data have diminished expectations for a September rate hike.
USDCAD technical outlook.
The intraday USDCAD technicals are bearish while trading below 1.3120 looking for a break of support at 1.3040 to extend losses to 1.3000 and then 1.2950. A break above 1.3110 targets 1.3240. The uptrend from April remains intact while prices are above 1.2950.
Chart: USDCAD 4 hour