Canadian Dollar Update April 17, 2019
USD/CAD Open: 1.3335-1.3336 Overnight Range: 1.3274-1.3373
The Canadian dollar was rangebound in overnight currency exchange markets. Oil is at $64.09 and gold is at $1,278. US markets are lower. There are no releases scheduled for today’s session.
The short-term USD/CAD technicals are neutral-bearish. For today, USD resistance is at 1.3378. Support is at 1.3252.
The Canadian dollar rallied after China released better-than-expected economic data overnight. China said March Retail Sales rose 8.7% compared to 8.2% in February while Industrial Production soared 8.5% compared to February’s 5.3% gain. Q1 Gross Domestic Product growth was 6.4% (compared to a forecast 6.3%) Global markets liked the news and quickly switched to "risk-seeking" mode. Asia and European equity indices rallied, and U.S. equity futures are pointing to a higher open on Wall Street today.
The Canadian dollar climbed alongside the Australian dollar with gains fueled by a jump in commodity prices. West Texas Intermediate oil rose from $63.93 U.S. to $64.58 in Europe. The rally was sparked by the American Petroleum Institute’s weekly crude stocks change report that showed U.S. inventories falling by 3.09 million barrels in the week ending April 12.
The China data added another layer of support because improved global growth sentiment as did news that China’s refinery output rose 3.2%. Oil prices continue to be underpinned by sanctions against Iran and Venezuela and production cuts by the Organization of the Petroleum Exporting Countries.
The Canadian dollar was steady in early Asia trading because all eyes were on NZD/USD. The kiwi started free-falling after New Zealand inflation data was weaker than expected. March Consumer Price Index rose just 1.5% compared to February’s 1.9% increase. That news sparked chatter that the Reserve Bank of New Zealand would cut the Overnight Cash Rate (OCR) sooner than previously expected. NZD/USD tumbled from $0.6774 to $0.6671. The China data took the currency off it's low, but prices are well-below their opening level.
GBP/USD traded erratically but inside a fairly narrow $1.3034-1.3065 range. There were plenty of U.K. economic reports released today including March CPI (Actual 1.9 vs forecast 2.0%), Producer Price Index, Retail Price Index and DCLG House Price Index. They were all weaker than forecast. However, GBP/USD traders remain focused on Brexit and the improved prospects for a "soft-Brexit," which is supporting prices.
EUR/USD traded quietly as well. Euro-zone CPI rose 1.4% y/y in March, which was bang on the forecasts and the euro-zone trade surplus rose. It wasn’t enough to extend EUR/USD gains and prices slipped in early Toronto trading.
Canadian dollar traders are awaiting this mornings release of March inflation and February trade data. Both reports are expected to show improvements on the February results. March CPI is expected to rise 1.9% compared to the 1.5% increase seen in February while Canada’s trade deficit is forecast to narrow to $3.50 billion from $4.25 billion.
Today’s U.S. data won’t be a factor leaving FX traders to seek direction from Wall Street price movements.
Today’s Suggested Range USD/CAD: 1.3300 – 1.3400
Rahim Madhavji | Knightsbridge Foreign Exchange | Toll-Free: 1-877-355-5239
Knightsbridge Foreign Exchange has based the opinions expressed herein on information generally available to the public. Knightsbridge Foreign Exchange makes no warranty concerning the accuracy of this information and specifically disclaims any liability for trading decisions based on the opinions expressed and information contained herein. Such information and opinions are for general information only and are not intended to present advice with respect to matters reviewed and commented upon.
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