Picture: Wikcommons

September 16, 2020

USDCAD open (6:00 am ET) 1.3157-61, Overnight Range 1.3158-1.3199

  • US Retail Sales data halts US dollar slide-Fed ahead
  • Canada CPI as expected
  • Oil prices climb after API reports 9.5 million barrel drawdown

FX Ranges at a Glance

Source: IFXA Ltd/RP

FX Recap and Outlook  US Retail Sales rose 0.6%, and 0.7% ex-autos, helping to put the brakes to an earlier US dollar slide.  The results were a tad worse than forecast with the June results being revised lower, but they still point to a recovering US economy.

Canada CPI rose0.1% y/y in August, unchanged from July’s results.  USDCAD traders ignored the news

The US dollar drifted lower in Asia and Europe but managed to stop the bleeding in early NY trading.

The focus is on the FOMC meeting this afternoon.  The Fed is not expected to deliver any “earth-shattering” news and will leave rates and policy unchanged.  The Fed releases a new summary of projections, which should reinforce the “low rates for an extended period” message.

The OECD released a modestly better global growth forecast.  The global economy is expected to shrink 4.5% rather than -6.0% forecast in July.

EURUSD climbed to 1.1882 from 1.1830, then dipped modestly on EURGBP selling. EURUSD gains were mostly due to pre-Fed positioning.  Prices may have benefitted from better than expected Eurozone Trade data.

GBPUSD traded sideways until mid-morning in Europe, then it rallied, rising from an Asia low of 1.2878 to 1.2970. News that Boris Johnston is open to diluting his Internal Market bill and making concessions to the EU on fisheries sparked the rally.  UK inflation data was weak but ignored

USDJPY extended overnight losses in early NY trading, in part due to concerns of a more dovish than expected Fed outcome.  USDJPY slid to 105.00 after opening in NY at 105.22.

AUDUSD and NZDUSD are at the top of their overnight ranges, boosted by broad, bearish US dollar sentiment.

NZDUSD got an added lift on news the government would ease coronavirus restrictions.

USDCAD under-performed again.  Prices inched down from the overnight peak of 1.3199 to 1.3158 where they found support.   The jump in WTI oil prices was a non-factor. 

USDCAD Technicals: USDCAD is running about like a headless chicken.  It has a minor upward bias ab above 1.3150, inside the well-entrenched 1.3000-1.3260 range that has contained moves since August 17.  For today, USDCAD support is at 1.3140 and 1.3110.  Resistance is at 1.3205 and 1.3240. Today’s Range 1.3130 -1.3210

Chart: USDCAD 1 day

 Source:  Saxo Bank

FX open (6:00 am EDT) High, Low, and previous close

Source:  Saxo Bank