The Canadian dollar is trading at its overnight peak supported by broad (but minor) U.S. dollar weakness against the major G-10 currencies.
Friday, Statistics Canada announced that Canada regained 303,100 jobs in March, greatly surpassing the forecast for a 100,000-job gain. The Canadian dollar climbed on the news, but the gains were stilted because current coronavirus lockdown measures suggest the gains may be reversed in April.
Nevertheless, the Canadian dollar outlook is rosy. Canada’s is expected to see a strong post-coronavirus recovery, in part due to spillover benefits from American stimulus programs. The Canadian dollar is underpinned by steady to firm crude prices, and a modestly upbeat global risk sentiment.
There are concerns. Geopolitical tensions are rising, and the U.S. is at the centre of all of them. U.S. Secretary of State Antony Blinken said the U.S. is concerned about China’s aggressive actions against Taiwan. The Americans are unhappy with China’s actions in South China Sea.
The U.S. Secretary of Defence is discussing joint exercises with the Philippines, as a subtle warning to Beijing.
Russia’ troop buildup on the Ukraine border is another major concern, especially after Putin successfully annexed the Crimea. Middle East tensions are flaring. An Iranian nuclear facility lost power due to “cyber-terrorism”, and Iran believes Israel was involved. European Union tariffs on imports of Chinese aluminum product take effect tomorrow.
Asia equity markets closed with losses. European bourses are mixed, and U.S. equity futures are flat to slightly lower .Gold prices dipped while Crude prices climbed. Bitcoin (BTC/USD) is above the $60,000.00 level.
EUR/USD drifted lower in Asia then bounced from $1.1872 to $1.1918 in Europe after better than expected economic data. Eurozone Retail Sales rose 3.0% m/m in February, compared to the downward revised, 5.2% drop in January. The EUR/USD technicals are bullish above $1.1820, looking for a break above $1.1930 to target $1.2000.
GBP/USD tracked EURU/SD moves, rallying strongly in Europe with prices climbing from $1.3670 to $1.3752 in early N ew York trading. The easing of lockdown restrictions, and expected economic outperformance compared to the Eurozone, supports prices. Traders are looking for a retest of the $1.3800 area.
USDJPY retreated as U.S. Treasury yields traded with a modest negative bias and because of minor risk aversion from geopolitical tensions.
AUD/USD and NZD/USD traded quietly, moving with the prevailing U.S. dollar sentiment. Traders are awaiting the Reserve Bank of New Zealand monetary policy meeting, Wednesday, and Thursday’s Australia employment report.
There are not any U.S. economic data reports of note today.