Canadian Dollar Update October 28, 2019 – Canadian Dollar inching higher
USD/CAD Open: 1.3059-1.3060 Overnight Range: 1.3049-1.3078
Oil is at $56.34 and gold is at $1,494.50. US markets are higher today.
The short-term USD/CAD technicals are neutral-bullish. For today, USD resistance is at 1.3092. Support is at 1.3016.
The Canadian dollar is inching higher. It is not alone. The Australian and New Zealand dollars have moved higher as well in the wake of EURUSD. The single currency managed to push above 1.1100 in early Toronto trading, following an uneventful overnight session where it drifted inside a 1.1077-96 range.
Risk sentiment is on the positive side of the ledger due to ongoing progress in the US and China trade negotiations. Both sides made positive noises over the weekend, suggesting that they are on track to have a Phase 1 agreement ready to be signed at the November 16-17 APEC meeting.
US Treasury yields have surged on the news. The 10-year Treasury yield rallied to 1.841 after touching 1.74% on Thursday. That move underpinned USDJPY and the currency pair consolidated earlier gains in a narrow 108.67-108.78 band.
Fans of Brexit will continue to dine on their daily diet of headlines and rumour. European Council President Donald Tusk confirmed what everyone expected and announced a three-month extension to the Brexit deadline. Parliament is due to vote on Prime Minister Boris Johnson’s election call today. GBPUSD is trading in the middle of its overnight 1.2813-1.2858 range.
FX traders will be very busy this week but not today. The Bank of Canada and FOMC policy meetings are on Wednesday, the Bank of Japan policy meeting will precede month-end portfolio rebalancing flows on Thursday, and Friday heralds the US employment report.
As usual, the FOMC meeting will garner the most attention. Expectations are nearly unanimous for a 0.25% cut in the overnight Fed Funds range. However, analysts are undecided as to whether the Fed will announce an end to “mid-cycle adjustments.” Traders are keeping a watchful eye on US economic reports for signs of a slowing economy.
Canadian analysts believe the Bank of Canada will leave rates unchanged. Domestic inflation is on target, the economy continues to grow, and there are signs of an easing in global trade tensions.
US equity futures are pointing to a positive open on Wall Street. However, FX markets are likely to continue to drift inside narrow ranges due to a lack of economic data available today.
Today’s Suggested Range USD/CAD: 1.3010 – 1.3110
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