The US dollar opened in New York with modest gains compared to Friday’s close, despite some selling pressure seen in Asia and early European trading. Furthermore, the moves were more “noise” than substance as FX ranges were narrow.
USDJPY inched higher throughout the Asia session and in early European trading rising from 113.88 to 114.2 The move was supported by Friday’s US jobs report and weak Machinery Orders data (Actual 0.6% vs. forecast 7.7%, y/y)
An AUDUSD rally in Asia, from was snuffed out in European trading as US dollar buyers emerged. China CPI (Actual -0.2% vs. forecast -0.1% m/m) and PPI (Actual 5.5% vs. forecast 5.5% y/y) had no bearing on trading. NZDUSD flat-lined in a tight band and was ignored.
EURUSD ticked higher in Asia and then reversed the move in Europe. Traders are torn between the chance of another US rate hike and the risk of a quicker end to QE in Europe.
Sterling tracked the EURUSD trading patter over night, rising in Asia and falling in Europe. Weak UK data reports in recent days have diminished the prospects for a UK rate hike and weighed on the currency.
Oil prices continued to trade with a negative bias. Friday’s report of yet another increase in the number of US drilling rigs. The on-going supply concerns have led to talk of additional production caps from Opec. However, that chatter hasn’t provided any support for prices.
USDCAD drifted higher in overnight trading but remains well -below the pre-employment data levels on Friday. Broad US dollar demand and a whiff of profit-taking ahead of Wednesday’s Bank of Canada policy decision is providing the support.
A lack of actionable Canadian and US economic reports will leave currencies trading within their overnight ranges while tracking moves in equities and oil.
Fed Chair Janet Yellen’s semi-annual testimony to Congress (formerly called Humphrey-Hawkins) is slated for Wednesday. No one is expecting her to say a whole lot about anything but it provides traders with a ready-made excuse to do nothing until then.
|10-Jul-17||Open-6 am EDT||High||Low|
USDCAD Technical outlook:
The USDCAD technicals are bearish while prices are below 1.3000 which will now act as resistance, a level being guarded by 1.2960 which is the 61.8% Fibonacci retracement level of the May 2016-May 2017 range. That break opens the door to 1.2770, the 76.4% Fibonacci level. For today, USDCAD support is at 1.2890 and 1.2860. Resistance is at 1.2930 and 1.2960.
Today’s Range 1.2870-1.2950
Chart: USDCAD 1 hour
Source: Saxo Bank
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