Canadian Dollar Update, December 23, 2020 – Canadian Dollar Uptrend is still Intact
USD/CAD Open: 1.2869-73, Overnight Range: 1.2836-1.2914
WTI Oil is at $48.45 and gold is at $1,878.40. US markets are higher today.
For today, USD resistance is at 1.2881. Support is at 1.2809.
• Trump threatens to not sign COVID-19 Relief bill
• GBPUSD supported by Brexit deal “hopes”
• US dollar gives back some of yesterday’s gains
The Canadian dollar recouped some of yesterday’s lost ground in an uneventful, low-volume overnight session. Its direction continues to be determined by every shift in US dollar sentiment, and today’s sentiment is cautiously bearish for the greenback. Canada GDP for October is expected to rise just 0.2%.
President Trump threw a wrench into plans for the COVID-19 Relief bill that Congress agreed to on the weekend. To say that Mr. Trump was unhappy is an understatement. He called the Relief bill “a disgrace” in a six-minute video released last night. Trump was outraged that the bill only provided $600.00 for Americans and little to nothing for restaurants, etc. He demanded that individual Americans receive $2,000.00 per family member, or else he hinted he wouldn’t sign the bill.
FX markets were not overly concerned with the US political developments. Instead, prices were driven by GBPUSD moves. UK and EU trade negotiations are ongoing. There is talk that the official Brexit date of December 31, is not necessarily the absolute final day when a “hard” Brexit occurs if there is not a deal. Instead, some believe the EU and UK could agree to extend the date, enacting any legislation required to skirt legal issues.
GBPUSD climbed from 1.3361 in Asia to 1.3443 in Europe, and has been consolidating in a 1.3415-1.3430 range in Toronto trading. Prices were supported by news that France eased border restrictions and is allowing UK freight traffic into the country.
EURUSD is trading with a modest bid, supported by broad-based US dollar weakness, however gains are limited because of ongoing concerns that the COVID-19 restrictions will be a drag on Q1 economic growth.
There are plenty of US economic reports released today. However, the resurgence of coronavirus cases across the US suggests today’s data is too stale for those traders working, to care.
Initial Jobless Claims are forecast at 883.000, November Durable Goods Orders expected to rise 0.6% (October 1.3%) and New Home Sales are expected to be unchanged. Michigan Consumer Sentiment is expected to be largely unchanged at 81.3.
Today’s Suggested Range USD/CAD: 1.2820 – 1.2920