Today is the “Ides of March.” It wasn’t a good day for Julius Caesar. It hasn’t been a good day for FX markets either, with traders sitting on the sidelines, preferring to avoid a similar fate. The threat of a trade war, wobbly equity markets, a lack of actionable economic data and next week’s Federal Open Market Committee meeting provided them with all the incentive needed to do nothing. The US dollar opened in New York with tiny gains across the board, except against the Japanese yen.
USDJPY dropped from 106.34 to 105.79 and then spent the rest of the time bouncing between the low and 106.10. Persistent risk aversion concerns drove prices lower.
NZDUSD plunged to 0.7306 from 0.7332 when Q4 GDP missed forecasts, posting a 2.9% rise instead of the predicted 3.1%. Prices rebounded almost immediately after the weakness was attributed to weather issues. AUDUSD inched lower throughout the day.
EURUSD traded sideways in a 1.2353-83 band. The Swiss National Bank policy meeting did not offer any surprises. They left rates on hold and reminded traders that they would “remain active in FX markets.”
Sterling didn’t go anywhere in Asia but dropped from 1.3987 to 1.3923 just before New York opened. Russia has yet to respond to Britains expulsion of 23 Russian diplomats.
Oil prices are well above yesterday’s low. Traders did not react to an International Energy Agency report that although global crude demand is rising, it is being outpaced by supply. WTI traded in a $60.84-$61.14 range.
USDCAD was ignored. A dovish Bank of Canada and NAFTA concerns are underpinning the currency pair.
This morning’s US data which includes Jobless Claims, Import?Export prices and NY Empire State Manufacturing Survey was positive and provided modest support to the greenback. However, the prospect of fresh sanctions on China will limit FX moves.
USDCAD Technical Outlook
USDCAD is modestly bid inside a narrow 1.2900-1.3000 trading range. A decisive break above the 1.3000-1.3015 suggests further gains to 1.3150 with 1.3440 being a stretch target. A break below 1.2900 and then 1.2840 would argue for additional 1.2650-1.3000 range trading. For today, USDCAD support is at 1.2940 and 1.2910. Resistance is at 1.3000 and 1.3040.
Today’s Range: 1.2940-1.3000