Canadian Dollar Update July 29, 2019 – Canadian Dollar “slip-sliding away”
USD/CAD Open: 1.3155-1.3156 Overnight Range: 1.3149-1.3183
Oil is at $56.56 and gold is at $1,418. US markets are mixed today.
The short-term USD/CAD technicals are neutral-bearish. For today, USD resistance is at 1.3187. Support is at 1.3132.
The Canadian dollar slipped lower in a mostly quiet FX session in Asia and Europe. There is an undercurrent of concern that the Bank of Canada may be forced out of its neutral monetary policy stance by the actions of other central banks, particularly the Fed. The Federal Open Market committee meeting is Wednesday. A 0.25% rate cut is fully priced into markets. The surprise would be if the cut was larger. The odds of that happening are 23%. FX markets are eagerly awaiting the FOMC statement and Fed Chair Powell’s press conference for further insight into the rate outlook.
Broad US dollar strength undermined the Antipodean currencies to start the week. AUDUSD and NZDUSD drifted lower, and both currencies are approaching key support levels.
The latest round of US/China trade negotiations kicked off this morning. Analysts suggest these talks will not result in a trade break-through. So does President Trump. He said he expected China to drag the talks out until the US election.
The US dollar opened in Toronto on a mixed note with the G-10 major currencies hovering around Friday’s closing levels. The British pound was the exception. GBPUSD dropped from 1.2387 to 1.2302 in early Toronto trading after UK Cabinet Minister Michael Gove said the government was operating on the assumption of a “no-deal Brexit”. Traders were also spooked by Conservative party gaining in polls, raising fears of a snap election.
USDJPY inched higher on the back of general US dollar strength, and steady US Treasury yields. Traders are biding their time until Tuesday’s Bank of Japan policy meeting. The BoJ is widely expected to leave rates and guidance unchanged.
The Canadian dollar inched lower alongside the G-10 currencies. Traders are ignoring West Texas Intermediate (WTI) oil prices and are concerned that the Bank of Canada may follow the Fed in lowering interest rates.
There are not any top tier economic reports due today in Canada or the US.
Today’s Suggested Range USD/CAD: 1.3110 – 1.3210
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By KBFX | July 29, 2019 | Daily Update | 0 comments