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Canadian Dollar Update, July 14, 2020 – Canadian Dollar adrift

USD/CAD Open: 1.3626-30, Overnight Range: 1.3595-1.3646

WTI Oil is at $39.35 and gold is at $1,802.30. US markets are lower today.

For today, USD resistance is at 1.3657. Support is at 1.3588.

• Canadian dollar tracking broad US dollar sentiment and Wall Street
• Global stocks dip on profit-taking and mild risk aversion
• US inflation data and Wall Street earnings reports will provide FX direction today

The Canadian dollar joined EUR, JPY, GBP, and NZD in opening lower compared to yesterday’s close. EUR and CHF are higher due to mild risk aversion sentiment, while AUD gained on the back of China trade data.

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FX action was relatively subdued in Asia. USDJPY traded with a slight bearish bias but stayed inside yesterday’s trading band. The Bank of Japan policy meeting is tonight, and they will provide fresh forecasts, although policy will remain unchanged.

China reported that exports and imports increased in June. Imports jumped 2.7% while exports increased by 0.5%, with the gains attributed to the easing of lock-downs in the US and Europe. Rebounding China growth gives hope for a rebound in the global economy. However, the trade data news was diminished somewhat, by escalating US/China tensions.

USDJPY drifted lower in Asia, but losses were not sustained, and the currency pair is trading in Toronto where it closed Monday.

AUDUSD and NZDUSD are trading at the top of their overnight bands, buoyed by the China trade data, higher EURUSD prices, and Wall Street equity futures in positive territory. Equity traders were nonplussed after JP Morgan announced a 50% drop in Q2 profit because the details of the earning report were stellar.

EURUSD pushed higher in Europe after German and ZEW Survey results were close to forecasts. Germany July ZEW Economic sentiment was 59.3 compared to an estimate of 60.0. Eurozone Economic sentiment was unchanged from May’s results. EURUSD is probing resistance at 1.1370 targeting 1.1430.

GBPUSD started falling yesterday, and it continued to do so overnight, until finding a bit of support at 1.2508. Prices were undermined after UK May GDP was just 1.8%, disappointing analysts and traders looking for a 5% gain.

Canadian dollar direction continues to be dictated by broad US dollar sentiment. WTI oil prices have been steady in a $38.50-$41.10 band which has helped or hurt the Loonie’s fortunes. Traders are hoping for direction from Bank of Canada guidance tomorrow.

Today, FX direction will be dictated by US inflation data, Wall Street, and maybe even comments from a series of Fed speakers.

Today’s Suggested Range USD/CAD: 1.3580 – 1.3680

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By KBFX | July 14, 2020 | Daily Update | 0 comments