Canadian Dollar Update, June 30, 2021 – Canadian Dollar Finds a Short-term Bottom
USD/CAD Open: 1.2402-06, Overnight Range: 1.2384-1.2422, Previous Close: 1.2401
WTI Oil is at $73.59 and gold is at $1,768.00. US markets are mixed today.
For today, USD resistance is at 1.2448. Support is at 1.2351.
• Canadian dollar poised to be best performing G-10 major currency in H1
• Canada GDP ahead
• US dollar starts NY session on firm footing
The Canadian dollar lost ground in Asia overnight, but recovered its losses in early NY trading. It is the last day of the first half of 2021, and the Canadian dollar is a super star. The Loonie gained 2.13% since January 4, making it the best-performing G-10 major currency. The Japanese yen was the worst, shedding 7.51% of its value in the same period.
Canada April GDP is expected to have dropped 0.8% m/m. The decline is due to restrictive measures imposed to combat the third-wave of the coronavirus pandemic, so the result should not impact the currency.
Coronavirus delta variant outbreaks in Australia, UK and other regions injected a note of caution into overnight markets. The US dollar added to yesterday’s gains at the NY open, except against JPY. In Asia, the Nikkei and Hang Seng closed in negative territory, while China’s Shanghai Shenzhen CSI 300 and Australia’s ASX 200 closed higher. European bourses are lower, led by a 0.90% dip in Germany’s DAX index. S&P 500 futures are off their worst levels and flirting with unchanged but are poised to end the month with a 2.0% gain. WTI oil inched higher, while gold prices are a tad lower. US 10-year Treasury yields lid to 1.453% from 1.504%.
EURUSD dropped from 1.1908 to 1.1885 in Europe and opened at the low in NY. Eurozone CPI was 1.9% y/y, as expected, but it was a tick slower than the ECB target and the May result. German unemployment dropped, a sign of an improving domestic economy, but traders ignored the news. They were guided by bearish technicals, looking for a breach of 1.1840 while prices are below 1.1910.
GBPUSD dipsy-doodled, falling from 1.3858 in Asia to 1.3817 in Europe on news that UK Q1 GDP shrank 1.6% q/q, a tick weaker than the 1.5% expected. Prices rebounded to 1.3872 into the NY session, in part because of month-end and quarter-end demand for GBP. Spiking delta-variant COVID-19 cases in the UK are a drag on GBPUSD gains.
AUDUSD and NZDUSD were weighed down by softer commodity prices, and risk aversion after Australia imposed new lockdown measures to combat a wave of COVID cases.
US Chicago PMI and Pending Home Sales data are released today. Canada data includes Raw Material Price and Industrial Product Price indexes.
Happy Canada Day. No update tomorrow.
Today’s Suggested Range USD/CAD: 1.2350 – 1.2450