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 is modestly weaker in a sluggish New York trading environment. Traders appear reluctant to extend US dollar losses much further due to the magnitude of the correction this week because of the reality of a robust US economy and a hawkish Fed. The greenback inched higher against EUR, GBP, and CHF, is flat against AUD, NZD, and JPY, and posted a tiny gain against CAD.
Traders are content to bide their time until the release of the August 1 Federal Open Market Committee meeting minutes at 18:00 GMT. The minutes are not expected to offer any surprises leaving the Friday/Saturday Jackson Hole Symposium as the next market flashpoint.
President Trump’s political and possible legal woes are an entertaining distraction in a sluggish trading environment but are unlikely to impact FX markets. The Washington Post reported that the US Constitution doesn’t allow for the criminal indictment of a sitting president;
Wall Street is ambivalent. The DJIA opened in the red put is currently trading in positive territory. The S&P 500 is flat and the NASDAQ is slightly lower.
USDCAD bounced erratically after the June Retail Sales data were released. The -0.2% decline was exactly as forecast. Statistics Canada noted that Q2 Retail Sales rose 1.0% compared to 0.5% in Q1. The more significant risk to the Canadian dollar is the Nafta renegotiation. Politico reported that a US/Mexico “handshake” trade deal might be announced as soon as tomorrow. Canada was excluded from the last series of meetings, and if the US/Mexico have a deal, Canada may be in a “take it or leave it” position.
USDCAD is in a minor downtrend while prices are below 1.3040 looking for a break of support in the 1.2990-1.3005 zone to extend losses to 1.3060. A decisive break below 1.2960 targets 1.2750. A move above 1.3040 suggests further 1.300-1.3200 consolidation.