Usd / Cad - Canadian Dollar Gnawing At Resistance.
Date
9/14/2023 3:10:26 PM
(MENAFN- Baystreet.ca)
USD / CAD - Canadian dollar gnawing at resistance.
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- ECB rate decision looms
-Retail Sales and Producers reports on tap.
-dollar rangebound overnight, opens mixed.
USDCAD open: 1.3530-34, overnight range: 1.3515-1.3556, close 1.3550, WTI $89.39, Gold, $1911.28
The Canadian dollar continues to gnaw through variresistance areas and is currently at its best level in two weeks. The gain is driven by rising oil prices and modest weakness in thedollar against the G-10 major currencies.
West Texas Intermediate (WTI) oil prices inched higher again overnight, rising from $88.69 per barrel to $89.40 in early NY trading today.
Traders ignored the Energy Information Administration (EIA) report yesterday, which showedcrude inventories rising in the previweek. Instead, they focused on yesterday's OPEC Oil Monthly report, which warned that crude supplies will become tighter into year-end. Price gains are also being driven by speculators, as hedge funds have increased bullish bets by over 30% since June.
The oil price rally has given the Canadian dollar an added boost, but if the rally stalls and next week's FOMC meeting is hawkish, the Canadian dollar will flounder.
It is a busy day fordata. August Retail Sales are forecast to rise by 0.2% m/m, and ex-auto's are expected to rise by 0.4% m/m. The Producer Price Index is expected to rise by 1.2% y/y compared to 0.8% in July, which could ignite freshdollar demand due to its risk for higher CPI readings.
FX activity was muted overnight ahead of today's European Central Bank (ECB) meeting. The odds for a rate hike or pause are evenly split, suggesting EURUSD will see a bit of volatility today. A dovish pause will sink EURUSD and put 1.0500 in play, while a dovish hike will still lead to EURUSD selling but at a slower pace. A hawkish hike will drive EURUSD to 1.0850 rather quickly.
GBPUSD drifted higher in Asia, rising from 1.2469 to 1.2507 before dropping down to the bottom of the band due to soft RICS housing price data and EURGBP demand ahead of today's ECB meeting.
USDJPY was choppy but rangebound in a 147.02-147.46 band, retreating from the top in Asia, then bouncing into 147.37 in Europe. Japanese investors sold ¥3.63 trillion to buy foreign bonds, providing some support for USDJPY.
AUDUSD climbed from 0.6415 to 0.6454 in the wake of a stronger-than-expected employment report.
Canada Wholesale Sales are forecast at 1.4% in July.
Learn how KnightsbridgeFX can help you save up to 2% when buying or sellingdollars compared to your Canadian bank's rates – click here to compare bank rates
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