Canadian Dollar Update, April 13, 2021 – Canadian Dollar Slides Ahead of US CPI
USD/CAD Open: 1.2586-90, Overnight Range: 1.2561-1.2592, Previous Close: 1.2561
WTI Oil is at $60.23 and gold is at $1,746.90. US markets are mixed today.
For today, USD resistance is at 1.2561. Support is at 1.2515.
• US Inflation data highly anticipated
• Bitcoin posts new high
• US dollar opens mixed, then catches a bid
The Canadian dollar traded quietly overnight then came under pressure in early NY trading. The US dollar opened on a mixed note, but edged higher in early trading due to pre- US CPI jitters.
US March Inflation is expected to rise 2.5% y/y, with the ex Food and Energy component rising 1.5%. Analysts suggest the risk is for a better than expected result and that is making traders nervous. If they are correct, US Treasury yields may spike toward the 1.75% level, boosting the US dollar and driving equity prices lower. However, on the weekend, Fed Chair Jerome Powell reiterated that the Fed will not raise interest rates “any time soon.”
St Louis Fed President James Bullard said the same thing, but added “When you start to get to 75% vaccinated, 80% vaccinated and CDC starts to give more hopeful messages that we are bringing this under better control and starts relaxing some of their guidelines, then I think the whole economy will gain confidence from that,” However, he is not a voting member of the FOMC at this time.
Bitcoin provided some distraction for traders with prices setting a new record high of $63,191.37 just before NY opened. The rally is partially due to anticipation of the Coinbase listing on the Nasdaq.
EURUSD continues to dance with the 200 day moving average at 1.1897. The single currency drifted from 1.1915 to 1.1884, weighed down by caution ahead of the US inflation data and weaker than expected Eurozone ZEW economic sentiment for Germany and the eurozone. The German government is expected to announce a series of new COVID-10 rules. EURUSD technicals are bullish above 1.1770.
GBPUSD climbed from 1.3744 to 1.3768 in Asia and Europe, then dropped to 1.3727 in NY trading. February GDP rose 0.4% compared to the 2.2% drop in January. Despite the increase, UK growth is well below February 2020 levels. GBPUSD technicals are bullish above 1.3670.
USDJPY rallied from 109.38 to 109.74 in Asia then erased the move in Europe, dropping to 109.24 just before NY opened. Traders are adjusting positions into the US inflation data release.
Today’s Suggested Range USD/CAD: 1.2500 – 1.2600