Canadian Dollar Under Threat of Terminating NAFTA
President Donald Trump undermined the Canadian dollar in overnight trading. At a rally in Wyoming, the President repeated his disdain for the North American Free Trade Agreement, suggesting that the United States could not make a new deal without terminating the old agreement first.
USDCAD rose to 1.2596, in part because of the Trump comments, fully reversing yesterday’s USDCAD losses after the stronger than expected Canadian Retail Sales report.
Today’s North American FX session will be stymied by an undercurrent of uncertainty stemming from this week’s Kansas City Federal Reserve’s Jackson Hole symposium. Some traders are concerned that European Central Bank President Mario Draghi may use his time at the podium to outline the ECB’s plans to end the quantitative easing program. Other traders think that Federal Reserve Chair Janet Yellen might reveal US monetary policy developments and strategy. However, some economists and strategists at major banks don’t believe any monetary policy issues will be discussed by either central banker.
In Asia, the New Zealand Treasury released a pre-election, Economic and Fiscal update. In it, they reduced GDP growth forecasts from 3.7% to 3.5% for the year ending in June 2018. NZDUSD dropped, falling from 0.7281 to 0.7209. AUDUSD followed the Kiwi lower, but the dip was shallow
USDJPY inched higher in early Asia trading and then slipped steadily until the New York open, where it opened at 109.32
EURUSD traded sideways in Asia and dropped in Europe. Preliminary Markit Manufacturing PMI data for the Eurozone was 57.4 (forecast 56.3) EURUSD jumped from 1.1741 to 1.1793.
Brexit issues pushed GBPUSD lower in a 1.2793-1.2832 range.
Oil prices were a tad softer overnight on news that Libya’s largest oilfield was restarting production.
FX Ranges for major currency pairs