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USD / CAD - Canadian dollar counting down to BoC decision. Add this under widget Previous Articles Subscribe to Get Small Cap News & Alerts Rahim Madhavji - Wednesday, March 13, 2024
USD / CAD - Canadian Dollar is unchanged at open
- Markets move past US inflation data.
- UK GDP suggests recession ended in January.
- US dollar looking for direction.
USDCAD: open 1.3490-94, overnight range 1.3485-1.3499, close 1.3493, WTI $78.58, Gold, $2158.34
The Canadian dollar dropped on the heels of seemingly hot US inflation report yesterday. USDCAD rallied from 1.3467 to 1.3526 but the rally was not sustained, and it closed almost unchanged from the previous day.
US CPI rose 3.2% y/y in February, a tick above the 3.1% seen in February, while the more important Core-CPI rose to 3.8%, which was above the forecast (3.7%) but below January's result (3.9%).
It wasn't the result that traders wanted to see, so they looked for reasons to disregard the data. One such reason was that core inflation is still declining. Another reason was that the increase in headline inflation was due to the services component where housing prices play a large role. Analysts suggest that the housing data provided by the Bureau of Labor Statistics comes with a lag, but private sector services have lots of evidence to suggest services will continue to fall.
Wall Street liked that conclusion and drove the S&P 500 to a record close.
WTI oil traded in a $77.61-$78.77 band but opened up a tad softer than yesterday. Prices are underpinned by the American Petroleum Institute reporting that US crude inventories fell 5.53 million barrels in the week ending March 8.
EURUSD traded sideways in a 1.0920-1.0934 range, and traders are looking for the next catalyst to provide direction. They may be waiting until the March 20 FOMC meeting. Gains were limited partly because Eurozone Industrial Production fell more than expected in January (actual -3.2% m/m, forecast -1.5%, December 1.6%).
GBPUSD is trading in a 1.2774-1.2801 range but was unable to make any new gains after January GDP rose 0.2% m/m, which suggests the UK recession is over. Manufacturing Production was flat (actual 0% vs. December 0.8%) but supply chain disruption due to the Israel-Hamas war played a large role.
USDJPY bounced in a 147.24-148.05 range and is near the top in early NY trading partly because the 10-year US Treasury yield climbed to 4.162% from 4.087% yesterday.
AUDUSD is at the bottom of its 0.6600-0.6619 range due to a bit of negative risk sentiment from the latest China developer news.
The US and Canadian economic calendars are empty.
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