Canadian Dollar Update February 25, 2019
USD/CAD Open: 1.3155-1.3156 Overnight Range: 1.3112-1.3157
The Canadian dollar was rangebound in overnight currency exchange markets. Oil is at $56.26 and gold is at $1,334. US markets are higher. There are no releases scheduled for today’s session.
The short-term USD/CAD technicals are neutral-bearish. For today, USD resistance is at 1.3192. Support is at 1.3106.
The Canadian dollar is on a roll. It is not the only currency that is doing well. All the G-10 majors are adding to their Friday gains following rumours and then confirmation that U.S. President Trump delayed raising tariffs on Chinese imports for two months. The tariff increase was slated for March 1, but as the China/U.S. trade talks progress, the delay was seen as evidence that the odds for a trade deal improved.
Canadian Retail Sales were dropped 0.1% in December which isn’t that stellar of a result considering the time of year. However, the 1.7% rise, year over year, helped to underpin the domestic currency on Friday.
The Canadian dollar got a bit of lift from President Trump’s tweets yesterday. He tweeted: “I am pleased to report that the U.S. has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues. As a result of these very productive talks, I will be delaying the U.S. increase in tariffs now scheduled for March 1. Assuming both sides make additional progress, we will be planning a Summit for President Xi and myself, at Mar-a-Lago (Florida), to conclude an agreement. A very good weekend for U.S. & China!”
Asian equity indices rallied on the news led by led by a 5.98% gain China’s Shanghai Shenzhen 300 index. The antipodean currencies rallied. AUD/USD rose from $0.7132 to $0.7179 and NZD/USD climbed from $0.6844 to $0.6899. The New Zealand dollar got an added lift from better than expected Retail Sales. (Actual 1.75%, q/q vs 0.3% previously)
USD/JPY’s rally on the improved risk sentiment was rather shallow. Soft U.S. Treasury yields hampered price gains. The 10-year Treasury yield is below 2.69%. The Nikkei rose 0.48%.
President Trump’s tariff tweet underpinned EUR/USD, but the single currency struggled to rally and traded in a narrow $1.1330-$1.1357 range. The euro-zone has its own problems. There is an election in Spain and right wing, anti-Euro, campaigning always makes traders nervous. The European Central Bank appears to have dialed up is dovish stance and traders are concerned that they will maintain their dovish bias for longer than was previously expected.
Sterling is in a world of its own, as usual. Prime Minister Theresa May delayed this week’s parliamentary vote on the Withdrawal Agreement from the European Union for about two weeks. There were plenty of press reports suggesting that the E.U.’s March 29 Brexit deadline will be extended as well, which as underpinned GBP/USD. Traders believe that the deadline extension reduces the odds of a “no-deal” Brexit.
There aren’t any Canadian economic data available today, suggesting oil price movements will govern the price action.
Today’s Suggested Range USD/CAD: 1.3100 – 1.3200
Sincerely,
Rahim Madhavji | Knightsbridge Foreign Exchange | Toll-Free: 1-877-355-5239
www.knightsbridgefx.com
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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