NY Open: USD finds its mojo
The US dollar has been under pressure all week, but finally began to pick up the pace after today's New York bell. The catalyst is not entirely clear, but it could come down to GBP.
FX Trader, Loonieviews.net
The US dollar showed promise of a rally when New York opened. It didn’t quite happen. GBP, CHF, and JPY reversed opening losses (compared to Friday’s New York close) and are mildly higher at mid-morning. The commodity currency bloc is a tad softer, and EURUSD is flat.
Wall Street is mixed. The DJIA and S&P 500 are higher while the NASDAQ is a touch in the red. Traders are reportedly looking for positive progress from this week’s China/US trade talks. The Wall Street Journal reported that trade negotiators want the framework of a deal to be ready when Presidents Trump and Xi meet in November. Arguably, the meeting is too far away to provide any meaningful or lasting support to markets or trade sentiment.
EURUSD is mildly bullish while trading above 1.1400 looking for a break above the 1.1450-60 area to extend gains to 1.1480 and then 1.1510. The move is unlikely to happen today due to a lack of US economic data. The Federal Open Market Committee minutes are due Wednesday, and even though they aren’t expected to create any FX sparks, traders will be content to stay on the sidelines
Sterling has been a little frisky. GBPUSD broke above minor resistance at 1.2750 and is probing resistance in the 1.2780 level. The rally is just a correction unless prices break above the downtrend line from May which comes into play at 1.3100 and is guarded by resistance at 1.2950. Brexit and UK political drama should limit gains.
USDCAD is consolidating Friday’s losses triggered by higher than forecast inflation. USDCAD support in the 1.3000-50 area held, in part due to ongoing concerns about the Nafta negotiations. The weekend media in Canada warned that Canada’s exclusion from the most recent talks implies that the US could offer a “take it or leave it” deal for Canada to sign. Soft oil prices aren’t doing the Canadian dollar any favours, either.