Risk Appetite in Oil and Commodities Helps Lift the Loonie.
Thursday 1 January, 1970
Daily Currency UpdateThe Loonie is firm starting the North American trading session. NAFTA talks are still keeping the market on its toes, as Freeland and Lightizer are scheduled to resume at 11:00 EST. Chapter 19 and diary supply will be some of the topic of discussions along with automobile tariffs. Housing Starts in August printed worse than expected at 201.0K when forecast was for 216.3K. The rest of the week will be quiet on the economic calendar and only the second tier New Housing Price Index is due to release on Thursday.
Key MoversThe Greenback is mixed and relatively quiet across the board today with no major economic fundamentals to be released. Only the second tier JOLTS Jobs Opening in July released, which printed better than expected at 6939. Wholesale Trade Sales and Inventories also printed, but fell short of expectation at 0.0% and 0.6% respectively. Next major risk event will come on Thursday when CPI will release along with Retail Sales on Friday.
The EUR is trading relatively flat today despite positive fundament data from the Eurozone. German ZEW Investor Confidence data came in at -10.6 versus the forecast of -13.5. This is an improvement from the previous figure of -13.7. EUR/USD failed react to the supportive data as it continues to trade within its recent range. Short term risk for the EUR is on the downside with support coming in on the downside around the 1.1510 area.
The Sterling is softer this morning after coming off yesterday’s highs. Average Weekly Earnings 3m/y released better than expected at 2.6% when expectation was for 2.5%. Unemployment Rate held at 4.0% as expected and Employment Change dipped to 3K from the expected 9K. The softness mainly came after The Treasury announced that BoE Governor Carney will be extending his term to a period beyond his expiration date next year to see how the economy develops throughout Brexit.
The Australian dollar saw limited movements to start the week, holding steady at support levels of 71 US Cents. Opening the morning treading water on renewed trade concerns between the United States and China, AUD/USD was muted as traders largely ignored the release of China’s CPI print for the month of August, which came in unexpectedly higher at an annualized rate of 2.3%.
The pair tested its lowest level since December of 2016
With the deteriorating Australian dollar continuing to face pressure from news both domestically and abroad, a further test of intermediate support at 0.7045 could possibly occur.
The NZD traded in a narrow range overnight, anchored between 0.6520 and 0.6545 before retracing and consolidating slightly higher than last week’s 30-month lows at 0.6525.
In what is a quiet week on the domestic data front for the Kiwi, the domestic unit will continue to take its cues from offshore datasets and developments in global risk sentiment. Of particular interest to NZD/USD traders will be CPI and PPI measures out of the world’s largest economy later this week which are set to be followed up by retail sales numbers for august on Friday. With the interest rate differential between the 2 currencies continuing to move in favour of the greenback, any upside surprises in these reads will likely put the Kiwi on the back foot as markets adjust their rate hike expectations.
- USD/CAD: 1.3132 - 1.3175 ▲
- CAD/EUR: 0.6539 - 0.6568 ▲
- CAD/GBP: 0.5818 - 0.5858 ▲
- CAD/AUD: 1.0676 - 1.0716 ▲
- CAD/NZD: 1.1634 - 1.1677 ▲