Canadian Dollar Update January 17, 2020 – Canadian Dollar drifting lower
USD/CAD Open: 1.3041-1.3042, Overnight Range: 1.3033-1.3067
Oil is at $58.50 and gold is at $1,554.80. US markets are higher today.
The short-term USD/CAD technicals are neutral-bearish. For today, USD resistance is at 1.3091. Support is at 1.3019.
The Canadian dollar is drifting lower in early Toronto trading, after stagnating overnight. The catalyst for this morning’s selling pressure is just broad US dollar demand, stemming from weak UK and European economic data releases.
The Canadian dollar is not alone. AUDUSD and NZDUSD are inching lower alongside the Loonie, as the positive sentiment from China and the US signing the Phase 1 Trade Agreement fades. Analysts are suggesting that the benefits from the deal are degraded because both sides are keeping existing tariffs in place. China Q4 GDP rose 6.0% y/y in December, which was as forecast. It is the lowest growth in 30 years. However, the easing of trade tensions suggests there is upside potential in 2020. China Retail Sales rose 8.0%/y/y while Industrial Production was 6.9% y/y. Both results were better than expected.
AUDUSD is further undermined by expectations that the Reserve Bank of Australia will cut interest rates at least two more times in the coming year. NZDUSD outperformed the Aussie dollar but still drifted lower.
USDJPY seems to have lost upside momentum after breaking above 110.00 this week. Prices peaked at 110.28 in Asia but are down to 110.12 in Toronto today, which may be because of profit-taking ahead of the US long weekend holiday.
GBPUSD inched higher overnight rising from 1.3053 to 1.3118 in Asia and into early European trading. Prices collapsed to 1.3028 when weaker than expected UK retail sales data results were posted. Retail Sales fell 0.6% and Core-retail sales fell 0.8% m/m in December. Both items were supposed to rise 0.7% and 0.5% respectively. The disappointing news convinced many traders that the Bank of England (BoE) would cut interest rates at the January 30 meeting. The data followed dovish comments from BoE Governor Mark Carney and other Monetary Policy Committee members this week.
EURUSD lagged the Sterling price action. Recent tepid Euro area data compared to upbeat US economic results drove EURUSD below minor uptrend support and turned the intraday technicals bearish.
The US dollar lost ground since its open in Toronto on Monday. The US long weekend holiday (for Martin Luther King Day) and expectations for positive US economic reports suggest the US dollar will grind higher today. However, the jury is still out as to whether the US gains will be enough to drive USDCAD above resistance in the 1.3060-90 area.
Today’s Suggested Range USD/CAD: 1.3000 – 1.3100
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By KBFX | January 17, 2020 | Daily Update | 0 comments