Wall Street lets the good times rest
FX Trader, Loonieviews.net
Summary: Q2 is just one day old, and Wall Street traders are taking a break. At least that is what this morning’s open suggests.
US Durable Goods Orders in February were down 1.6%, better than the forecast but worse than January’s 0.1% rise which was revised down from 0.4%. The ex-transportation component also disappointed. However, the data and its minimal impact on markets will quickly be forgotten with traders looking ahead to Friday’s nonfarm payrolls report.
USDCAD is holding its own in the face of sliding Antipodean currencies. AUDUSD and NZDUSD have not recovered from a somewhat dovish Reserve Bank of Australia statement or soft Kiwi data. That is thanks to surging oil prices and a Bank of Canada dove with a bit of a bite.
BoC Governor Stephen Poloz was at his doublespeak best yesterday in a speech in Iqaluit. He said the outlook for the domestic economy continues to warrant rates below the neutral range and said that the “data showed a “mixed picture” which must be carefully monitored. Then he said “there are clear signs that Canada is adjusting to the challenges. After taking into account the economy’s structural adjustment to lower oil prices that is still going on, we can see many areas of encouraging economic growth.”
His dovish comments with a bit of a bite, combined with WTI oil prices flirting with $62.00/barrel led to USDCAD briefly breaking below the 100-day moving average at 1.3320. A decisive break of this level targets 1.3193, the 200-day moving average.
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