The US dollar opened in New York with small gains against the Japanese yen and Swiss franc, losses against Sterling and the Australian dollar and largely unchanged against the Euro and the Canadian dollar.
The UN voted for more sanctions against North Korea.FX markets didn’t seem to care, even though Kim Jong-un had threatened the US with “the greatest pain and suffering.” if they continued to demand sanctions.
Weaker than expected Australia August NAB Business Confidence data (Actual 5 vs. July 12) drove AUDUSD from 0.8032 to 0.7999, but the move didn’t last. Prices recovered to 0.8047 by mid-morning in Europe on an improved risk environment.
The improved risk environment snapped a Kiwi skid. NZDUSD dropped from 0.7265 to 0.7218, just as Europe opened. Prices rallied to 0.7320 at the start of New York trading.
USDJPY traded sideways in Asia and then added to this week’s gains in Europe. Rising Treasury yields supported prices
Sterling was the story of the day in Europe. The UK government won the first vote on EU withdrawal which helped to underpin GBPUSD. Better than expected UK data, including Retail sales, PPI and CPI sparked a rally that lifted GBPUSD from an overnight low of 1.3161 to 1.3281 where it is opening in New York.
Gold prices drifted lower in Asia, in response to the reduced geopolitical risk but recouped those losses in Europe.
Oil prices were stagnant. Traders did not react to a Reuters story, quoting “unnamed sources” reporting that Opec production declined in August.
Oil prices are off of Friday’s low of $47.30/barrel and are trading at $47.79/b. Prices got a little support on news that Saudi Arabia is discussing production cut extensions with Venezuela and Kazakhstan. However, traders are still concerned about how Hurricane’s Harvey and Irma will impact prices.
USDCAD remains trapped inside the 1.2060-1.2170 range seen since last Thursday. Traders are awaiting for Thursday’s US CPI report for direction.
It should be a quiet day. There is only the US JOLTS report to entertain traders. There isn’t any data from Canada. Concern about North Korea’s response (if any) to the fresh round of sanctions, may also keep traders on the sidelines.
USDCAD Technical outlook:
The intraday USDCAD technicals are bearish while prices are below 1.2190, looking for a break of support at 1.2060 to extend losses to 1.1950. Support at 1.2000 should prove sticky. A rally above 1.2190 would meet resistance at 1.2240 and again at 1.2405. For today, USDCAD support is at 1.2080 and 1.2050. Resistance is at 1.2140 and 1.2170.
Today’s Range 1.2060-1.2160
Chart: USDCAD 30 minute
Source: Saxo Bank