USD / CAD - Canadian dollar nose-dives - InvestingChannel

USD / CAD – Canadian dollar nose-dives

– New month but same old worries.

– EU and UK data weigh on EURUSD and GBPUSD.

– US dollar on fire, opens very strong compared to Friday.

USDCAD: open: 1.3607-11, overnight range: 1.3562-1.3613, close 1.3579, WTI $91.52, Gold, $1834.26

The Canadian dollar rallied in early trading on Friday but erased all the gains during the month and quarter-end fixing window, and sentiment turned negative. The losses continued overnight.

The intraday USDCAD technicals are bullish after Friday’s moves above resistance at 1.3460 and 1.3520, which shifted the focus to 1.3660.

October started with holidays in China and Australia. Chinese markets are closed all week to celebrate the establishment of the People’s Republic of China, which today should be called the Xi Jinping Republic of China. The people have nothing to do with it.

Canada is also closed for a holiday, but that depends on where you live and if you are a federally regulated public or private sector employee. Banks and government institutions are closed everywhere, but only BC, PEI, and Nova Scotia give people the day off.

The Canadian dollar did not get any support from Friday’s July GDP report. Statistics Canada reported that the economy grew at 0%, which was a tick lower than the 0.1% increase in June. Their forecast for August is also a tepid 0.1%, which argues for the Bank of Canada to leave rates unchanged on October 20.

EURUSD dropped in a 1.0527-1.0592 range after soft Eurozone Manufacturing PMI (actual 43.4 vs. August’s 43.5).

GBPUSD rallied then dropped in a 1.2148-1.2161 band due to broad US dollar demand and disappointing UK data. The Manufacturing PMI survey rose to 44.3 from 43.0 in August but is still one of the weakest readings in the past fourteen years.

USDJPY bounced in a 149.43-149.82 range. A slightly better than expected Tankan Survey undermined prices, while rising U.S. Treasury yields gave USDJPY a bid.

AUDUSD traded within a narrow range of 0.6394 to 0.6446 during a quiet session as Australia was closed for Labour Day. Selling pressure stemmed from a soft TD Inflation report, which showed a cooling of September’s inflation to 5.7% year-on-year, down from 6.1% in August.

The U.S. ISM Manufacturing Purchasing Managers’ Index (PMI) is expected to show an increase from 48.4 to 48.6 in today’s release.

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