Canadian Dollar Update November 28, 2019 – Canadian Dollar on US Thanksgiving holiday
USD/CAD Open: 1.3280-1.3281, Overnight Range: 1.3275-1.3299
Oil is at $57.81 and gold is at $1,462.60. US markets are lower today.
The short-term USD/CAD technicals are neutral-bearish. For today, USD resistance is at 1.3300. Support is at 1.3275.
The Canadian dollar will trade like it is a holiday in Canada today. The Americans are celebrating Thanksgiving and Black Friday eve. Friday, trading desks are open, but lightly staffed.
The US holiday was an excuse for Asia markets to sit on the sidelines, and for the most part, they did. However, the headline that President Trump signed the Hong Kong Human Rights and Democracy Act sparked a flurry of risk aversion trading. Asia equities prices fell, oil prices dropped, and the commodity currency bloc came under pressure.
Traders are concerned about this latest development’s impact on the Phase 1 trade negotiations. China said they would retaliate. Beijing described the US action as “meddling in its internal affairs.”
The Canadian dollar sank alongside the Antipodean currencies. The trio was traded with a negative bias yesterday after a host of American economic data, combined with pre-holiday position squaring, boosted the US dollar. US Durable Goods Orders, led a parade of mostly positive economic reports yesterday. The data supported Fed Chair Jerome Powell’s claim that the economy is “in a good place”, which alleviated concerns that interest rates would soon be cut.
The lofty level of oil prices tempered Canadian dollar losses. West Texas Intermediate (WTI) rose 7.3% since November 20. Prices retreated to $57,87 overnight, following yesterday’s EIA data showing a 1.5 million barrel increase in crude inventories, and the bout of risk aversion. The losses still leave WTI well above its November lows thanks to expectations that OPEC will announce an extension to the production cuts, at the December meeting.
Once again, the British pound was the liveliest currency in overnight markets. GBPUSD rallied yesterday and extended those gains in Asia after another YouGov poll predicted a 68 seat majority for the Conservatives. GBPUSD climbed from 1.2920 at Wednesday’s close to 1.2950 before giving back all those gains in early Toronto trading.
EURUSD traded sideways in a 1.1002-1.1017 range. Traders ignored a slew of German and Eurozone economic reports which were mixed to mildly soft, even though some of the data was better than forecast.
Today’s Canada Current account data (forecast-$9 billion vs previous -$6.3 billion) should not have an impact on Canadian dollar trading. Friday is month-end, and the US stock market performance suggests that the Canadian dollar may be sold for portfolio rebalancing requirements.
Today’s Suggested Range USD/CAD: 1.3230 – 1.3330
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