The Canadian dollar jumped a little overnight. USD / CAD fell to $ 1.2271, then fell to $ 1.2317 when New York traders turned on their screens, then fell to $ 1.2292. Price movement is just “noise” as foreign exchange trading volumes were less than usual due to the UK weekend.
The week in Asia began very calmly. The Chinese and Japanese markets are closed until Thursday. In China, there is a break on Labor Day, and in Japan, the holidays are Golden Week. European stocks rose this morning and US futures indicated a positive open on Wall Street.
Today’s US data includes Personal Consumer Expenditure (PCE), Chicago Purchasing Managers’ Index and Michigan Consumer Sentiment. Gold and oil prices are slightly higher than on Friday.
The loonie remains robust thanks to the Bank of Canada’s hawkish bias, firm oil prices and robust economic growth expectations. Traders are oblivious to the slow introduction of vaccines as few people under 50 have received at least one vaccine. Meanwhile, 40% of Americans have received at least one injection.
West Texas Intermediate (WTI) oil prices provide another level of support for the Canadian dollar. The uptrend of 2021 for WTI crude oil is not broken as long as prices are above $ 61.80 a barrel, awaiting a test of resistance around $ 67 a barrel. Traders expected global demand to rise as the world’s major economies recover from the pandemic.
The euro / dollar rate in Asia rose from 1.2014 to $ 1.2055 in Europe due to strong economic data. Retail sales in Germany rose 7.7% mom in March compared to 2.7% mom in February. The final Eurozone manufacturing PMI for April was 62.9, slightly lower than expected, but still better than the 62.5 in March. The short-term outlook for EURUSD is bearish while prices are below $ 1.2080, with a move below $ 1.1980 with a target of $ 1.1940.
GBP / USD has a negative outlook after breaking the April uptrend line at $ 1.3890, while moving below $ 1.3870, losing to 1.3840. Markets in the UK were closed due to bank holidays in early May.
AUD / USD rose from $ 0.7708 to $ 0.7732, supported by a moderately soft US dollar against major currencies and a stronger-than-expected AIG Manufacturing Index, which stood at 61.7 versus 59.9 in March. Traders await tomorrow’s Reserve Bank of Australia monetary policy meeting and quarterly economic forecasts on Friday.
The US Manufacturing Supply Management Institute’s forecast will be 57.1 against 59.6 in March.
Raheem Madhavji is President of KnightsbridgeFX.com, a Canadian currency exchange that provides Canadians with better rates than banks.