Canadian Dollar Update, November 29, 2022 – Canadian dollar gains lag antipodean
USD/CAD Open: 1.3452-56, Overnight Range: 1.3411-1.3511, Previous Close: 1.3496
WTI Oil open at $79.26 and gold open at $1,755.57. US markets are lower today.
For today, USD resistance is at 1.3609. Support is at 1.3556.
- China Times tweets about easing of Covid restrictions
- Canada September GDP expected to be unchanged
- US dollar retraces most of yesterday’s gains
The Canadian dollar is trading erratically. USDCAD rallied from 1.3410 yesterday to close the session at 1.3496. Prices plunged to 1.3410 overnight then bounced to 1.3490 in early NY. The erratic trading is likely due to month-end portfolio flows as neither AUDUSD nor NZDUSD are trading in a similar fashion.
The Canadian dollar underperformed compared to the other commodity bloc currencies, AUD, and NZD, due to falling oil prices. West Texas Intermediate (WTI) dropped from $79.80/barrel to $73.60/b Monday, then rallied to $78.90 in early NY.
Oil traders are hoping that China eases its covid-19 restrictions and that Opec opts to cut production at Friday’s Opec General Meeting.
Global risk sentiment improved after a tweet by China Global Times Editor Hu Xijin tweeted “China may walk out of the shadow of COVID-19 sooner than expected.” He also said that most people most are no longer afraid of being infected and the current rate of severe cases is about 0.025%.
EURUSD rallied from 1.0340 to 1.0495 yesterday morning, then retraced the entire move in the afternoon, closing at 1.0340. Prices consolidated in a 1.0335-1.0395 range overnight. The war in Ukraine and fears of a winter energy crisis continue to cap EURUSD gains, although the downside is limited due to hawkish ECB rhetoric. The intraday EURUSD technicals are bullish above 1.0310.
GBPUSD dropped from 1.2115 yesterday to close at 1.1959, then rallied to 1.2063 in Europe this morning before consolidating choppily in a 1.1970-1.2025 band. The price volatility is due to month-end flows, EURUSD price swings, and position adjusting ahead of today’s Bank of England governor Bailey’s speech. GBPUSD technicals are bullish above 1.1920.
USDJPY traded choppily in a 137.55-139.40 range since Monday. Prices peaked at 139.35 in Asia overnight then slid to 137.95 in NY, weighed down by the soft US 10-year yield at 3.672% and by disappointing domestic data. Japan’s unemployment rate was unchanged at 2.6% (forecast 2.5%) while October Retail Trade rose 4.3% y/y rather than the 5.0% forecast.
AUDUSD rallied hard, rising from 0.6642 in Asia to 0.6747 in NY, powered by hopes that the Chinese economy will reopen sooner than expected and by the US dollar retreat against the majors.
US September Case-Shiller Home Price Index, and Consumer Confidence are ahead.
Today’s Suggested Range USD/CAD: 1.3500– 1.3600