Canadian Dollar Update, September 29, 2020 – Canadian Dollar stuck in a rut
USD/CAD Open: 1.3359-63, Overnight Range: 1.3352-1.3410
WTI Oil is at $39.30 and gold is at $1,891.70. US markets are lower today.
For today, USD resistance is at 1.3474. Support is at 1.3330.
• Canadian dollar traded sideways overnight
• GBPUSD rises on reports EU open to making concessions
• FX traders cautious ahead of Presidential Debate tonight
The Canadian dollar was largely ignored and remained trapped in a narrow trading range overnight. FX traders were cautious ahead of tonight’s US Presidential Debate. On one side, there is President Trump, “the man who pays no taxes,” and on the other side is Joe Biden, “the man who will raise taxes.” There are only 39 days to the election, and Mr. Biden is leading in most polls. On the same date in 2016, Hillary Clinton was leading in most polls, suggesting the election winner is still a coin toss.
The Canadian dollar greatly underperformed its antipodean peers in overnight price action. AUDUSD rose 0.59% while NZDUSD gained 0.53% on the back of a modest improvement in risk sentiment. Asia stock markets were mixed to flat, ignoring the Wall Street performance.
In Europe, Eurozone Economic Sentiment data was better than expected, rising 91.1 in September, compared to 87.5 in August. The news overshadowed soft inflation data from France and Spain. EURUSD technicals turned bullish on the break above 1.1670. Traders are now looking for a test of resistance in the 1.1750 area.
GBPUSD climbed in Asia, rising to 1.2887 from 1.2832, after The Times of London reported that the EU had dropped its demand for a broad agreement on areas in dispute in trade talks, before writing a trade agreement. In return, the UK will begin in-depth discussions on fishing and state aid, significantly reducing the risk of a “no-deal” Brexit.
USDJPY is trading just below its overnight peak of 105.73, as improved risk sentiment encouraged the unwinding of safe-haven trades. The Bank of Japan Summary of Opinions from the September 17 monetary policy meeting noted that “ the pace of the recovery is slow, so they must remain vigilant.”
AUDUSD tested support at 0.7000 last Friday, and it held. Prices have been climbing since, and the uptrend is intact above 0.7070. Improved risk sentiment has underpinned prices. NZDUSD is tracking AUDUSD gains.
Wall Street closed with decent gains, led by a 1.87% rally in the NASDAQ. That performance may not be repeated today if US futures are any indication. S&P 500 and Dow Jones Industrial Average futures are flat.
Today’s US data, which includes Case-Shiller Housing Price Index, Consumer Confidence, and Wholesale Inventories should not have much impact on FX trading, due to the upcoming debate.
Today’s Suggested Range USD/CAD: 1.3310 – 1.3410