USD / CAD - Canadian dollar stuck in a rut
- WTI oil prices fall 3.8% on possible US/Iran nuclear deal.
- US Retail Sales and speech by Powell in focus today.
- US dollar mixed overnight but claws back losses from yesterdays open.
USDCAD: open 1.3981, overnight range 1.3960-1.3989 close 1.3985, WTI 60.55, Gold 3164.72
The Canadian dollar remains rangebound but is trading erratically inside that band as direction continues to be determined by the prevailing US dollar sentiment. That won’t change today despite a lot of economic data being released in Canada and the US.
The Canadian data includes March Manufacturing Sales and Wholesale Sales, and Housing Starts for April. The results will not move the needle in USDCAD trading.
WTI oil prices dropped sharply due to the Energy Information Administration (EIA) reporting that US crude inventories rose by 3.4 million barrels last week and by reports that Iran and the US may be reaching a nuclear deal, at least according to Trump.
Todays US Retail Sales data excluding autos, are expected at 0.3% m/m) while the Producer Prices numbers are expected to be a mixed bag. Weekly jobless claims are projected to inch up to 229,000.
EURUSD traded in a 1.1172–1.1228 band, moving without conviction as traders digested regional data. Employment rose 0.3% q/q in the euro area, slightly above the prior reading, while industrial production climbed a solid 2.6% m/m. However, the modest 0.3% q/q GDP growth in Q1 missed the 0.4% forecast, limiting euro enthusiasm.
GBPUSD ranged between 1.3258 and 1.3305 in a quiet overnight session, despite a barrage of UK data. Q1 GDP grew by 0.7% and March added another 0.2%, placing the UK at the top of the G7 growth rankings. Disappointing March manufacturing (-0.8%) and industrial output (-0.7%) numbers dampened some of the optimism.
USDJPY drifted in a 145.48-146.75 band and ignored rising Treasury yields. The pair is currently focused on tariff threats against Japan’s auto industry. Bloomberg pegged the potential cost to Japanese carmakers at $19 billion, raising the stakes in future US-Japan trade talks.
AUDUSD traded in a 0.6415–0.6459 range and hit the top of the band in response to a robust jobs report. Australia added 89,000 new positions in April, smashing expectations for a 20,000 increase. The unemployment rate held steady at 4.1%, strengthening the case that the RBA may need to stay cautious as it weighs inflation risks tied to a tight labour market. The AUDUSD gains were erased by the New York open.
