CAD - Canadian Dollar
Tonight, Bank of Canada Governor Stephen Poloz could offer the Loonie a clear direction. So far, market participants are expecting the BoC to adopt a more dovish outlook in the coming months, especially after we heard the last BoC release and conference of monetary policy a few days ago. We will see how Poloz's speech goes given global risks and the fact that central banks such as the FED and RBNZ are on hold for now. Furthermore, if Poloz expresses any doubt over the economic outlook, this is likely to fuel speculation that an interest rate cut could be in the cards.
It is good to remember that the BoC has been the least dovish central bank over the last few months. Still, the Loonie could be under pressure if market participants see the risk of the BoC easing monetary policy in the next few months or if the global equity markets start to sell-off.
Technically speaking, the USD/CAD pair is trading 0.1 percent higher (weak Loonie) at 1.3263 at the time of this writing. A first resistance level is 1.3269, but if broken, it might go to 1.3298 in the next few hours. On the other side, 1.3254 and 1.3238 are the immediate support levels.
Chinese activity data for October came in weaker than expected. Industrial Production came in at 4.7 percent versus the 5.5 percent expected. Retail sales came in at 7.2 percent versus the 7.8 percent read. It is clear that trade war impacts are hitting the external sector, and domestic demand is not holding up as expected. The USD/CNH pair is trading flat at 7.0250 this morning.
Germany avoided a likely first recession after six years, stopping the speculation that the government will add fiscal stimulus any time soon. The EUR/USD spiked 21 pips from 1.0994 to 1.1015 right after the news but, it erased gains quickly.
European market participants probably noticed that a neutral Powell in the U.S. (i.e. there would no be more hikes in the short term in the U.S.) would weigh more in the shared currency. So, the EUR/USD is trading lower at around 1.0998, or 0.08 percent down, at the time of this writing.
The Aussie dollar is tanking on the weak employment report released last night. The unemployment rose back to 5.3 percent versus the forecasted 5.2 percent, which happened to be the previous unemployment number as well (5.2 percent). The employment change contracted by -19k, when the expected number was positive +16.2k. This is the first contraction since September 2016. At the same time, full-time employment fell -10.3k versus the prior +26.2k. The AUD/USD pair is plunging 0.88 percent at the time of this writing.
1.3252 - 1.3280 ▲EUR/CAD:
1.4550 - 1.4602 ▲GBP/CAD:
1.7025 - 1.7085 ▲AUD/CAD:
0.8956 - 0.9018 ▼NZD/CAD:
0.8435 - 0.8497 ▼