The Canadian dollar fell and then rallied overnight as traders looked for direction and opened in New York with little change. The currency is still torn between demand for the US dollar due to the upbeat outlook for the US economy versus Europe and the fundamentals of Canada that support the Canadian dollar.
The Canadian dollar is tracking the movement of EUR / USD, but is supported by improved internal fundamentals. USD / CAD intraday technical indicators are bearish below the $ 1.2630-50 area, waiting for a break below $ 1.2550 to push losses to $ 1.2450.
The minutes of the meeting of the Federal Open Market Committee on March 17 confirmed the words of Fed Chairman Jerome Powell about the rate hike “in the near future.” The minutes showed that Powell’s opinion was shared by the entire Committee. “All members agreed to maintain the target range for the federal funds rate between 0 and 0.25%, and they expected that it would be appropriate to maintain this target range until labor market conditions reached levels in line with the Maximum Employment Committee’s estimates. and inflation. rose to 2 percent and was going to moderately exceed 2 percent for a while. “
The EUR / USD rate fluctuated in the range of $ 1.1862-1.1882. The upside was closed because the minutes of the FOMC meeting did not provide any basis for triggering a global “risk rally”. The data for the Eurozone and Germany were not impressive. EUR / USD gains are capped by interest rate differentials between the US and the European Union, which are favored. Intraday technical indicators for the EUR / USD pair point to a bearish level below $ 1.1910.
GBPUSD is recovering after touching $ 1.3720 overnight. News that the UK could achieve “herd immunity” from coronavirus by Monday supported growth, as did better-than-expected data from the UK Construction Purchasing Managers’ Index, which stood at 61.7, up from 54.6.
USD / JPY fell from 109.89 to 109.22 in early New York trading. The dove-like FOMC minutes and the fall in the yield on 10-year US Treasuries below 1.65% are putting pressure on prices.
AUD / USD and NZD / USD traded quietly in narrow corridors, with prices tracking the general sentiment of the US dollar. Weaker-than-expected New Zealand business confidence data was ignored.
Powell speaks today (virtually) at a meeting of the International Monetary Fund. He is not expected to deviate from his US economic outlook. Weekly data on claims for unemployment benefits should also be provided.
Raheem Madhavji is President of KnightsbridgeFX.com, a Canadian currency exchange that provides Canadians with better rates than banks.