Canadian Dollar Slips Ahead of Month-end

The Canadian Dollar retreated overnight, along with the rest of the majors due to a perceived easing of tension between North Korea and the United States.  Only the Australian dollar managed to show a gain compared to Tuesday’s close and that gain was modest.

USDCAD is consolidating in a 1.2450-1.2550 range.  Traders are torn between expectations of further Bank of Canada tightening, US dollar sentiment and oil price direction.

Oil prices are weighed down by the uncertainty of the impact of Hurrican Harvey. Crude prices are lower while gasoline futures have risen.

In Europe, GBPUSD was very choppy in a 1.2897-1.2936 range.  That was due to ongoing Brexit issues and mixed data releases.  It was unchanged from the close at when New York started.

Across the channel, EURUSD was under pressure.  It continued to drop  after peaking at 1.2067 on Tuesday, bottoming out at 1.1939.  Prices lifted, slightly when Eurozone economic confidence data beat forecasts. Eurozone equity indices rose on the data.

In Asia, USDJPY extended Tuesday’s gains on fading concerns for an escalation in the US/North Korea war of words. Stronger than expected Japan July Retail Trade data (Actual 1.9% vs. forecast 1.1%, y/y) helped.

AUDUSD jumped on better domestic data as well. Construction Work Done, and Building Permits beat forecasts, lifting AUDUSD from 0.79433 to 0.7994.  However, the rally reversed in Europe.  The currency started in New York at 0.7955.

NZDUSD rallied in concert with AUDUSD  until outgoing RBNZ Governor Graeme Wheeler said that a weaker New Zealand dollar was needed.  NZDUSD dropped from 0.7275 to 0.7240.

US Q2 GDP (forecast 2.7%, annualized) Personal Consumption and Expenditures, EIA Crude stocks change, and ADP employment data are all due this morning. An upside surprise to GDP would trigger a strong US dollar rally.

Canada current account data is also on tap and expected to show the deficit widening to $17.4 billion from $14.05 b.

 

 

 

 

 

 

FX Ranges for major currency pairs

close Open High Low
29-Aug-17 30-Aug-17
EURUSD 1.1970 1.1950 1.1983 1.1939
USDJPY 109.75 109.89 110.16 109.55
GBPUSD 1.2922 1.2924 1.2936 1.2897
USDCHF 0.9554 0.9557 0.9570 0.9540
AUDUSD 0.7948 0.7955 0.7994 0.7948
NZDUSD 0.7249 0.7243 0.7276 0.7233
USDCAD 1.2522 1.2532 1.2537 1.2502
GOLD 1308.98 1311.00 1313.28 1306.66
WTI 46.37 46.19 46.37 46.07

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