Canadian Dollar Update June 27, 2019 – Canadian Dollar rides G-20 optimism wave
USD/CAD Open: 1.3119-1.3120 Overnight Range: 1.3110-1.3138
Oil is at $59.36 and gold is at $1,406. US markets are higher today.
The short-term USD/CAD technicals are neutral-bearish. For today, USD resistance is at 1.3158. Support is at 1.3099.
The world leaders from the top twenty nations are gathering in Osaka, Japan. They are gathered to discuss such weighty issues as the Global Economy, Trade and Investment, Innovation, Environment and Energy, and Employment.
The spotlight is on President Trump and Chinese President Xi Jinping. They are meeting on Saturday, and as a sign of good faith, Mr. Trump agreed to delay the imposition of new tariffs. No one expects a trade deal to be signed following the meeting but hopes are high that the trade discussions will resume, raising the odds that an agreement will be reached.
President Trump is upset with India and its trade practices. Mr. Trump is shocked at the audacity of India to react to his tariffs by imposing tariffs of their own. India raised duties on 28 US products after the American government withdrew free tariff entry on some Indian goods.
The FX market traded with a mildly risk positive tone overnight and continued that theme in early Toronto trading this morning. The Canadian dollar is consolidating yesterday’s gains and traded in a narrow range.
The renewed US/China trade optimism underpinned the Australian and New Zealand dollars which opened in Toronto, slightly firmer from where they closed. Prices are further supported by reports that portfolio managers may need to sell US dollars for month-end, quarter end, and half-year end, rebalancing purposes. That’s because the major US equity indices have had a good month and as of yesterday were up over 3.5%.
FX trading was choppy, and the ranges were narrow during the European session. EURUSD suffered after a spate of Eurozone data was weaker than expected. The data supports European Central Bank President Mario Draghi’s view that the weak Eurozone economy needs more stimulus. However, broad US dollar weakness due to month-end selling pressures supported prices.
The British pound is torn between selling due to no-deal Brexit fears and buying on the back of month-end demand. British Prime Minister candidate, Boris Johnson told reporters today that the odds of a “no-deal” Brexit were a “million to one”. GBPUSD got a modest boost from the remark up until traders remembered the day before he said the UK would leave the EU on October 31.
There is a lot of US data today including Pending Home Sales, Q1 GDP and Jobless claims. Traders and Fed Chair, Jerome Powell, will be “closely monitoring” the reports.
Today’s Suggested Range USD/CAD: 1.3070 – 1.3170
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