These birds of a feather don’t stick together

Forex 4 minutes to read

Summary:  The Canadian and Australian dollars went their separate ways today, each because of news on the inflation front. Meanwhile, equities shed their initial China-inspired gains when disappointment over Netflix filtered through.


The loonie and kiwi are a couple of birds with a glaring difference - the loon can fly and the kiwi cannot. That difference was on full display today. Kiwi face-planted after weaker than expected New Zealand inflation data while the loon soared when Canadian inflation beat expectations.

Statistics Canada reported that CPI rose 1.9% in March, year over year, well above the 1.5% level recorded in February. However, CPI excluding energy rose 2.2%. At the same time, Canada’s trade deficit narrowed in February and the January deficit was revised down as well. The news knocked USDCAD from 1.3338 to 1.3270. Prices bounced to 1.3338 as of 1410 GMT, due to a drop in WTI oil prices and the better than expected US trade data, which underpinned the greenback.

USDCAD is underpinned bullish technicals and a dovish Bank of Canada monetary policy outlook. Fibonacci support is at 1.3270 which represents the 50% retracement level of the February/March range. Prices continue to gravitate around the 100-day moving average at 1.3333. However, expectations for a Canadian growth rebound in Q2 and steady to high oil prices are capping topside moves.

The US goods and services deficit narrowed 3.46% to $49.4 billion in February which is an eight-month low. Some economists expect today’s data to contribute to a 1% jump in Q1 GDP which gave a bid to the US dollar.

The greenback is trading close to unchanged since New York opened against most of the major G10 currencies with AUDUSD and NZDUSD losing ground.
Wall Street opened with a bit of a pop, thanks to the earlier China data, but prices quickly deflated in early trading. Traders were not overly thrilled by quarterly reports from Netflix, (NFLX) which is down 1.34% or IBM which sank 5.22% in early trading. It wasn’t all bad news. Morgan Stanley (MS: NYSE) beat profit and revenue estimates and its shares are up 1.0%.
USDCAD. Source: Saxo Bank
Disclaimer

Saxo Capital Markets (Australia) Pty Ltd prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Combined Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)

Saxo Capital Markets (Australia) Pty Ltd.
Level 25, 2 Park Street
NSW 2000
Sydney
Australia

Australia

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

Saxo Capital Markets (Australia) Pty Ltd ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms & Combined Financial Services Guide & Product Disclosure Statement to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products such as CFDs and Margin FX products may result in your losses surpassing your initial deposits. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.
Please click here to view our full disclaimer.