The US dollar is in demand. The dollar is supported by optimism that the Republican’s will get a tax cut deal through Congress, by Fed Chair Yellen’s upbeat assessment of the US economy, yesterday and rising Treasury yields.

Nevertheless, the gains are not very impressive when viewed over the past month. In fact, the greenback is only modestly higher against two currency pairs, AUDUSD and NZDUSD.  It is unchanged against the Canadian dollar and down against the rest.

EURUSD climbed steadily in Asia, rising from 1.1845 to 1.1875, before dropping to 1.1810 in Europe. Disappointing Eurozone inflation data was behind the EURUSD selling. November CPI rose to 1.5% (forecast 1.6%, October 1.4%, y/y) while Core CPI was unchanged at 0.9%, y/y, and below the 1.1%, predicted.

Sterling added to yesterday’s New York gains during the Asia session and then consolidated the move in Europe. GBPUSD rose from 1.3410 to 1.3478 and is sitting at 1.3443 in New York,

USDJPY rallied from 111.90 to 112.46 on higher US Treasury yields and Janet Yellen’s upbeat economic assessment.

AUDUSD jumped from better than expected domestic data and China November PMI data (Actual 51.8 vs forecast 51.4)  The move reversed in Europe and AUDUSD opened in New York almost unchanged from the close.

NZDUSD was under pressure in Asia and traded sideways in Europe, falling from 0.6887 to 0.6834.

Oil prices were steady in Asia and choppy in Europe. The Opec meeting is still going on, but reports are that the cartel agreed to extend production cuts for all of 2018.

USDCAD ignored the pop in oil prices and climbed steadily, supported by broad US dollar strength.

It should be another busy day in FX land.  US data, (Jobless Claims, Personal Income and Consumption and Chicago PMI) should reinforce the US economic growth story. The US demand should be more than offset by expected strong US dollar selling for month-end portfolio rebalancing purposes.

USDCAD Technical outlook:

The technicals are bullish while prices are above 1.2710, looking for a break of the October peak of 1.2915 to extend gains to the 1.3015-20 area, last seen in July.  For today, USDCAD support is at 1.2860 and 1.2810.  Resistance is at 1.2915, 1.2950 and 1.3015.

Today’s Range 1.2830-1.2930