USD/CAD Open: 1.3196-00, Overnight Range: 1.3145-1.3210, Previous Close: 1.3150
WTI Oil open at $68.72 and gold open at $1,918.13. US markets are lower today.
For today, USD resistance is at 1.3220. Support is at 1.3147.
The Canadian dollar hit the brakes on this week’s rally and traded lower overnight. The currency was caught up in a wave of negative risk sentiment stemming from comments by Fed Chair Jerome Powell, aggressive rate hikes by the Bank of England and Norway’s Norges Bank, and soft PMI data in Europe and the UK.
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Canadian dollar sentiment also soured after West Texas Intermediate (WTI) oil prices plunged 6.2% from Thursday’s peak to the low in Asia overnight. Traders decided that the prospect of two (or more) US rate hikes and the absence of new fiscal stimulus in China were good excuses to book profits. The drop erased all of this week’s gains.
Asian equity traders ignored Wall Street’s positive close and sold stocks. The Nikkei fell 1.5% due to higher Japanese inflation, while Australia’s ASX 200 lost 1.34% due to Fed and RBA interest rate policy divergence.
European bourses are posting losses as traders digest yesterday’s UK and Norwegian rate hikes. The German Dax is down 0.71%, while the UK FTSE 100 has lost 0.23%. S&P 500 futures are down 0.46%, and the US 10-year Treasury yield fell to 3.74% from 3.80% at yesterday’s close.
EURUSD traded in a range of 1.0845-1.0958, with the low seen after weaker-than-expected German and Eurozone PMI data. German Manufacturing PMI dropped to 41 from 43.2 (forecast 43.5), while Eurozone manufacturing PMI ticked down to 43.6 from 44.8. Prices have since bounced to 1.0878, but the intraday technicals turned negative, targeting 1.0810.
GBPUSD is in the middle of its 1.2688-1.2750 band. Prices are underpinned by the Bank of England’s 50 bp rate hike and mixed UK economic data reports. Composite PMI dipped to 52.8 from 54, while Consumer Confidence was -24 compared to expectations for -26.
USDJPY chopped about in a range of 142.78-143.44. Prices were supported by the latest hawkish comments from Fed Chair Powell but pressured by Japanese Finance Minister Suzuki warning that “sharp FX moves are undesirable.”
AUDUSD continued to slide and fell to 0.6682 in NY from 0.6766 in Asia. Profit-taking and the outlook for higher US interest rates weighed on prices.
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