USD / CAD – Canadian Dollar awaiting direction.

– US inflation report likely to be inconclusive.

– UK employment report shows wage growth pressures easing.

– US dollar little changed in quiet overnight session.

USDCAD: open 1.3472-76, overnight range 1.3470-1.3487, close 1.3484, WTI $78.51, Gold, $2176.72

The Canadian dollar meandered aimlessly in a quiet overnight session. FX traders are hoping that today’s US inflation data will snap markets out of their lethargy. It won’t.

February CPI is expected to have risen by 0.4% m/m, which is a tad hotter than the 0.3% m/m increase in January. However, the more important Core-CPI is forecast to rise just 0.3%, a tick below the 0.4% m/m result last month.

The results will not do anything to suggest the FOMC will reduce interest rates next week, which means the post-data-FX volatility will dissipate quickly.

Oil prices are rangebound and therefore not having any impact on Canadian dollar trading. WTI drifted in a $77.95-$78.69 range overnight.

Russia’s crude exports by sea surged in the week ending March 10, according to Bloomberg, and the Russian crude output is 420,000 barrels/day more than what they agreed with OPEC. The increased production is one reason why the latest OPEC production cuts were largely ineffective.

The deterioration in Canada’s trade status with the US is a long-term negative for the Canadian dollar. Mexico has replaced Canada and is now America’s largest trading partner. Financial Post columnist Dianne Francis blames the Trudeau government‘s anti-business agenda for Canada’s loss of stature. She wrote that Canada’s anti-business policies and high taxes to pay for bloated government spending directed foreign investment to Mexico

EURUSD is in the middle of its 1.0920-40 range ahead of the US CPI data. German inflation data was as expected.

GBPUSD traded negatively in a 1.2776-1.2824 range after today’s employment report showed wage growth slowing, a prerequisite to a BoE rate cut. Average earnings rose 5.6% between November and January, which is down from 5.8% in the previous 3 months. UBS economists were unimpressed and pushed out their forecast for the first BoE rate cut to August from May.

USDJPY dropped then popped in a 146.62-147.62 range. The currency pair has been under pressure due to speculation that the BoJ will raise rates in March if the annual wage negotiations rise. PPI rose 0.2% m/m in February (forecast 0.1%). BoJ Governor Kazuo Ueda helped slow USDJPY losses by pointing out that although the economy was improving, there were some signs of weakness.

AUDUSD traded in a 0.6608-0.6622 range as traders returned from a long weekend and were content to await the results of today’s US inflation data. Australia Business Confidence rose to 10 from an upwardly revised 7 in January, which helped underpin prices.

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