Canadian Dollar Update, April 12, 2021 – Canadian Dollar at Overnight Peak
USD/CAD Open: 1.2546-50, Overnight Range: 1.2530-1.2566, Previous Close: 1.2528
WTI Oil is at $60.67 and gold is at $1,736.10. US markets are mixed today.
For today, USD resistance is at 1.2566. Support is at 1.2515.
• Fed Chair Powell repeats upbeat outlook and employment concerns
• Markets ignoring geopolitical tensions
• US dollar opens with small losses
The Canadian dollar is trading at its overnight peak supported by broad (but minor) US dollar weakness against the major G-10 currencies.
Friday, Statistics Canada announced that Canada regained 303,100 jobs in March, greatly surpassing the forecast for a 100,000 gain. The Canadian dollar climbed on the news, but the gains were stilted because current coronavirus lockdown measures suggest the gains may be reversed in April.
Nevertheless, the Canadian dollar outlook is rosy. Canada is expected to see a strong post-coronavirus recovery, in part due to spillover benefits from American stimulus programs. The Canadian dollar is underpinned by steady to firm crude prices, and a modestly upbeat global risk sentiment.
There are concerns. Geopolitical tensions are rising, and the US is at the center of all of them. US Secretary of State Antony Blinken said the US is concerned about China’s aggressive actions against Taiwan. The Americans are unhappy with China’s actions in South China Sea. The US Secretary of Defence is discussing joint exercises with the Philippines, as a subtle warning to Beijing.
Russia’s troop buildup on the Ukraine border is another major concern, especially after Putin successfully annexed the Crimea. Middle East tensions are flaring. An Iranian nuclear facility lost power due to “cyber-terrorism”, and Iran believes Israel was involved. EU tariffs on imports of Chinese aluminum product take effect tomorrow.
Asia equity markets closed with losses. European bourses are mixed, and US equity futures are flat to slightly lower. Gold prices dipped while Crude prices climbed. Bitcoin (BTCUSD) is above the $60,000.00 level.
EURUSD drifted lower in Asia then bounced from 1.1872 to 1.1918 in Europe after better than expected economic data. Eurozone Retail Sales rose 3.0% m/m in February, compared to the downward revised, 5.2% drop in January. The EURUSD technicals are bullish above 1.1820, looking for a break above 1.1930 to target 1.2000.
GBPUSD tracked EURUSD moves, rallying strongly in Europe with prices climbing from 1.3670 to 1.3752 in early NY. The easing of lockdown restrictions, and expected economic outperformance compared to the Eurozone, supports prices. Traders are looking for a retest of the 1.3800 area.
USDJPY retreated as US Treasury yields traded with a modest negative bias and because of minor risk aversion from geopolitical tensions.
AUDUSD and NZDUSD traded quietly, moving with the prevailing US dollar sentiment. Traders are awaiting the RBNZ monetary policy meeting, Wednesday, and Thursday’s Australia employment report.
There are not any US economic data reports of note today.
Today’s Suggested Range USD/CAD: 1.2500 – 1.2600