Canadian Dollar Update, May 14, 2021 – Canadian Dollar Opens Nearly Unchanged
USD/CAD Open: 1.2139-43, Overnight Range: 1.2133-1.2177, Previous Close: 1.2161
WTI Oil is at $65.20 and gold is at $1,838.30. US markets are higher today.
For today, USD resistance is at 1.2142. Support is at 1.2089.
• Loonie shrugs off BoC Governor comments
• US Retail Sales expected to rise in April
• US dollar opens with small losses
The Canadian dollar is poised to end a volatile trading week as the best performing G-10 currency.
The Australian dollar is the worst, having fallen 1.75% since Monday’s open. USDCAD bounced in a 1.2048 1.2204 range, but the currency pair is not far from unchanged on the week despite the volatility.
Bank of Canada Governor Tiff Macklem is responsible for USDCAD spiking to 1.2204 yesterday after he replied to a question about the currency’s value. He said that continued appreciation of the Canadian dollar could be a headwind to their export projection and, it could have a material impact on the economic outlook and monetary policy. Prices quickly retreated as Mr. Macklem was only stating the obvious.
The major Asia equity indexes closed with gains led by a 2.32% rise in Japan’s Nikkei 225. European stock markets are ticking higher into the US Retail Sales data, and S&P 500 futures suggest a positive open for Wall Street. Crude oil and gold prices are firm, while 10-year Treasury yields are steady at 1.64%.
EURUSD traded in a 1.2072- 1.2128 range supported by softer 10-year US Treasury yields and by the improved risk tone. EURUSD has a positive bias above 1.20540.
GBPUSD bounced in a 1.4038-1.4075 range. Yesterday, Bank of England Governor Andrew Bailey said they are “already seeing a strong UK recovery” and that higher inflation will not persist. He added that interest rates would remain low.
USDJPY continues to consolidate its post-US CPI gains, trading in a 109.26-109.65 range overnight as US inflation fears underpin prices.
AUDUSD consolidated earlier losses in a 0.7716-45 range and trades with a negative bias below 0.7760. AUDUSD is undermined by a drop in iron ore prices after reports China has told steel manufacturers to control price surges or face stiff penalties. NZDUSD outperformed its Australian cousin even though NZ Manufacturing PMI dipped to 58.4.
Canada Manufacturing Sales are expected to rebound to 3.5% m/m in March after falling 1.6% in February.
Wholesale Sales will improve to 1.0% from a 0.7% drop. Neither report should have an impact on the Canadian dollar. The focus is on US Retail sales, which analysts expect to rise 1.0% m/m in April. The result will be well below the 10% surge in March but strong enough to suggest the US economy is recovering rapidly.
Today’s Suggested Range USD/CAD: 1.2080 – 1.2180