Canadian Dollar Update December 16, 2019 – Canadian Dollar higher after Phase 1 agreement
USD/CAD Open: 1.3171-1.3172, Overnight Range: 1.3115-1.3186
Oil is at $60.22 and gold is at $1,479.90. US markets are higher today.
The short-term USD/CAD technicals are neutral-bearish. For today, USD resistance is at 1.3179. Support is at 1.3119.
The Canadian dollar extended last week’s gains in an uneventful overnight session. The press release from the US Office of the Trade Representative heralding the “historic and enforceable” Phase 1 deal, helped to support the Canadian dollar and the other commodity bloc currencies.
The press release lacked hard data. It said it “includes a commitment by China that it will make substantial additional purchases of US goods and services in the coming years.” But it doesn’t put a dollar value on said purchases. The fact sheet said the agreement addresses “numerous longstanding concerns in the areas of trade secrets, pharmaceutical-related intellectual property, geographical indications, trademarks, and enforcement against pirated and counterfeit goods,” but doesn’t say how.
FX markets are quickly switching to “holiday mode.” The US dollar opened in Toronto on a mixed note compared to how it opened on Friday. There were plenty of economic reports released in multiple regions, but for the most part, their impact on FX trading was minimal.
Poor German Manufacturing PMI results (actual 43.4 compared to forecast of 44.5) and mixed Eurozone PMI reports capped EURUSD at 1.1149, despite broad US dollar weakness.
As has been the norm lately, GBPUSD was the liveliest G-10 major currency overnight. Prices rallied to 1.3420 due to the ongoing squeeze on short GBPUSD positions, with improved risk sentiment giving prices an added lift. However, weak UK Manufacturing and Service PMI data knocked prices back to 1.3325 before it recovered to 1.3370 in Toronto trading.
The Canadian dollar continues to grind higher, supported by the surge in West Texas Intermediate (WTI) oil prices above $60.00/b.
There are not any top tier economic reports from Canada or the US available today.
Today’s Suggested Range USD/CAD: 1.3120 – 1.3220