Canadian Dollar Update September 25, 2019 – Canadian Dollar sidelined, again
USD/CAD Open: 1.3241-1.3242 Overnight Range: 1.3235-1.3288
Oil is at $56.24 and gold is at $1,512.20. US markets are higher today.
The short-term USD/CAD technicals are neutral-bearish. For today, USD resistance is at 1.3283. Support is at 1.3239.
The Canadian dollar is on the sidelines, again. The currency pair remains rangebound. USDCAD price action is locked inside a 1.3130-1.3340 range and has been, since the beginning of the month. There isn’t anything on the horizon that will threaten that range.
Global central banks are in easing mode. The US Federal Reserve cut interest rates this month as did the European Central Bank. The central banks in Australia and New Zealand cut interest rates earlier but not the Bank of Canada. The Bank of Canada’s last rate move was an increase of 0.25% to 1.75%. Interest rates have been left unchanged for the past seven policy meetings. Many economists penciled in a rate cut at the end of October, but recent strong domestic data has some of them reaching for their erasers. Steady BoC monetary policy alongside, steady to firm crude oil prices have managed to cap US dollar gains.
Low FX volatility is a common theme. EURUSD traded erratically in September. The price moves were contained in a 1.0925-1.1080 range and ECB, and FOMC policy meetings were not able to trigger breakouts in either direction.
President Trump’s speech to the United Nations yesterday gave rise to modest safe-haven demand for Japanese yen, Swiss francs and Euros. The President adopted a belligerent tone about China. He said they were currency manipulators, demand transfers of technology and had unfair barriers to trade. That wasn’t anything he hadn’t said before.
Traders took their price direction from Saudi Arabia developments. The Saudis said that full oil production would resume ahead of schedule. Later, the American Petroleum Institute reported weekly US crude inventories had risen by 1.4 million barrels. Increased crude supplies in the face of slowing global economic growth drove West Texas Intermediate prices from $58.68/barrel on Tuesday to $56.18/b today.
The US dollar came under pressure yesterday when US Speaker of the House of Representatives Nancy Pelosi said she would initiate impeachment proceedings against President Trump. However, the sell-off reversed itself overnight, and the US has more than fully recovered all the losses in Toronto trading today.
There isn’t any data of note from Canada or the US, leaving equity markets and headlines to drive FX direction.
Today’s Suggested Range USD/CAD: 1.3190 – 1.3290