Canadian Dollar Update September 9, 2019 – Canadian Dollar surges
USD/CAD Open: 1.3175-1.3176 Overnight Range: 1.3150-1.3177
Oil is at $57.44 and gold is at $1,517.60 US markets are mixed today.
The short-term USD/CAD technicals are neutral-bearish. For today, USD resistance is at 1.3190. Support is at 1.3129.
The Canadian dollar surged higher Friday and then consolidated those gains overnight. The Canadian dollar demand followed the release of US and Canadian employment reports. US nonfarm payrolls results were weaker than expected while the Canadian numbers beat the forecasts. USDCAD tumbled from 1.3235 to 1.3157 where they are sitting in early Toronto trading.
The Canadian dollar is getting support from Fed Chair Powell and crude. Oil prices added to Friday’s post NFP gains. West Texas Intermediate climbed from $56.87 on Friday, to $57.25 overnight, in part due to the improved outlook for global growth after a positive shift in the tone of the US/China trade talks. Prices got an added boost following comments by Saudi Arabia’s new oil minister. He said his government’s oil policy would not change. He added that the partnership between OPEC, Russia and non-OPEC countries would stay in place.
Fed Chair Jerome Powell did not offer any new insight for the US interest rate outlook. Mr. Powell downplayed recession concerns and predicted 2019 GDP growth of between 2.0-and 2.5%. The odds for a rate cut next week stayed at 91%.
President Trump’s tariff war with China is having an impact. China’s trade surplus shrank in August undermined by a 1.0% drop in exports.
The British pound was the biggest mover in the overnight market. GBPUSD gapped lower when Asia opened, falling to 1.2235 from Friday’s close of 1.2289. Traders were spooked by reports that Conservative Cabinet Minister Amber Rudd resigned her post. Also, there was a report that France would oppose granting an extension to the October 31 Brexit deadline. A series of better than expected UK economic data, led by a 0.3% m/m rise in June GDP, turned sentiment positive, triggering a steep short-covering rally. GBPUSD climbed to 1.2384 in early Toronto trading.
The GBPUSD rally pulled EURUSD higher. The single currency rallied to 1.1041 from 1.1017, garnering a modicum of support from better than forecast German trade data. Nevertheless, expectations that the ECB will renew monetary policy easing on Thursday capped gains.
The Japanese yen faded under the glare of improved risk sentiment. USDJPY inched up to 107.07 from 106.77 supported by the slightly more positive tone to the US/China trade talks. A rise in US Treasury yields underpinned prices.
The Canadian dollar wasn’t the only commodity currency to rise. AUDUSD and NZDUSD extended last week’s gains, as well. AUDUSD got additional support after Home Loans rose 5.0% in July. NZDUSD continued to squeeze short positions.
There aren’t any US or Canadian economic data release of note scheduled to be released today.
Today’s Suggested Range USD/CAD: 1.3130 – 1.3230
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