Canadian Dollar Update September 26, 2019 – Canadian Dollar inches higher
USD/CAD Open: 1.3266-1.3267 Overnight Range: 1.3231-1.3273
Oil is at $55.86 and gold is at $1,517.20. US markets are lower today.
The short-term USD/CAD technicals are neutral-bearish. For today, USD resistance is at 1.3290. Support is at 1.3248.
The Canadian dollar inched higher in another quiet overnight session. The currency recouped yesterday’s losses and is at the session high in early Toronto trading. The gains were made alongside AUDUSD and NZDUSD which firmed, garnering some support from US/China trade developments.
FX traders appear to be ignoring the drama around Trump’s possible impeachment and are more focused on trade developments. President Trump’s comments yesterday helped improve sentiment around the US/China trade negotiations. Both sides are expected to meet in Washington in October.
The commodity bloc currencies were underpinned in Asia due to Trump’s trade remarks and by comments from Reserve Bank of New Zealand Governor Adrian Orr. Mr. Orr said New Zealand was in a “good position,” adding that it was unlikely that the RBNZ would need to use unconventional monetary policy tools. NZDUSD jumped to 0.6310 from 0.6273 on the news.
AUDUSD underperformed its Kiwi cousin. AUDUSD slipped to 0.6748 from 0.6763 as some traders were worried that the Reserve Bank Australia would cut interest rates next week.
The Canadian dollar is getting a bit of support from oil prices. West Texas Intermediate bounced off Wednesday’s low thanks to the improving tone around US/China trade talks. However, gains are capped by concerns that with Saudi Arabia production returning to normal, oil supply will continue to outpace demand in the coming months.
UK politics drove GBPUSD lower overnight. Prices dropped to 1.2304 from 1.2309 as traders re-evaluate their views on the Brexit outcome. UK Prime Minister Boris Johnson does not appear to have a lot of support for his determination to take Britain out of the EU on October 31. Many of his party members, as well as the opposition, want to get an extension to the deadline.
EURUSD dropped to 1.0924 from 1.0964 and is sitting just above the low in early Toronto trading. The single currency is being weighed down by the European Central Bank’s new quantitative easing program and their dovish monetary policy outlook, as well as week Eurozone economic data.
US Q2 GDP data is expected to be unchanged at 2.0% y/y. Other US data reports include Initial Jobless claims, PCE prices and Pending Home Sales. These reports are not expected to generate any lasting FX activity. The Canadian calendar is empty.
Today’s Suggested Range USD/CAD: 1.3220 – 1.3320