The Canadian dollar is consolidating losses in a $1.2550-$1.2610 range. Direction is determined by the prevailing U.S. dollar sentiment at any given time and this morning that sentiment is modestly bullish. Traders are ignoring U.S. Treasury yields which have been fairly stable in the 1.62% range.
The Canadian dollar received a bit of support from the initial surge in oil prices following news that a container ship is blocking the Suez Canal. That support eroded after a rise in U.S. crude inventories for the week ending March 19, diminished demand expectations from the latest coronavirus outbreak in Europe.
Asia equity traders ignored the weak close on Wall Street. Japan’s Nikkei 225 closed with a 1.14% gain while Australia’s ASX 200 finished modestly higher. The major Chinese indexes were flat. European bourses are trading in the red while S&P 500 futures are a tad higher. Gold prices continue to flit around $1,730.00, and oil prices have dropped.
The other FX markets are mostly sideways in an uneventful overnight session. There is a high degree of uncertainty permeating markets, and COVID-19 is at the heart. An increasing number of new coronavirus cases in many parts of Europe and a thoroughly bungled COVID-19 vaccine rollout threatens vaccination programs in other countries, including the U.K. and Canada.
EUR/USD drifted in a $1.1803-$1.1827 range. Prices are weighed down by bearish technicals and poor economic prognosis for the Eurozone compared to the U.K. and the U.S.. The Swiss National Bank (SNB) left policy unchanged and tweaked their inflation forecast higher, and repeated that the Swiss franc was highly valued. The EUR/USD technicals are bearish below $1.1980
GBP/USD bounced off of $1.3772 and reached $1.3730 in early New York trading. The rally was due to profit-taking as Bollinger Band, and RSI indicators showed the currency pair was oversold. Prices also got a boost after Bank of England Chief Economist Andy Haldane predicted the U.K. would see a “roaring recovery.”
USD/JPY is trading at the top of its 108.74-109.16 range. Prices continue to track U.S. treasury yields, although month end, quarter end and Japanese year-end flows are having an impact.
AUDUSD climbed from $0.7580 to $0.7613 with an assist after Reserve Bank of Australia Deputy Governor Guy Debelle sounded upbeat about the employment situation and said he expected “positive surprises to continue.” NZD/USD rallied alongside AUD/USD.
U.S. Jobless Claims, (forecast 730,000), Q4 Gross Domestic Product (forecast 2.0%),a speech by Federal Reserve Vice Chair Richard Clarida and President Biden’s press conference are the highlights for today.