- Positive risk sentiment undermines greenback
- President Biden and China President Jinping meeting today
- US dollar remains under pressure
USDCAD snapshot open 1.3292-96, overnight range 1.3241-1.3304, close 1.3254, WTI $88.33, Gold $1757.44
The Canadian dollar opened a tad weaker than Friday’s close but continues to trade with a bullish bias. Canadian dollar traders have fully embraced the positive shift in global risk sentiment, which got an added boost from developments in China.
Chinese authorities have stepped up to support its floundering real estate sector and announced a 16-point plan to boost credit support for developers and reducing down payment requirements for home buyers.
In addition, the Peoples Bank of China (PboC) fixed the yuan 10-big figures below the fix on Friday, which helped undermine the US dollar against the major G-10 currencies.
Canadian dollar direction will continue to be determined by external forces until Wednesday’s inflation data. A higher-than-expected reading fuel expectations for further aggressive BoC rate hikes.
The short term USDCAD technicals are bearish looking for a drop to the 1.3210-40 area while prices are below 1.3330.
FX traders do not expect any market moving developments from the G-20 meeting today. President Biden and China’s Xi Jinping are meeting but unlikely to resolve any issues and just promise to keep talking.
The speculation that US interest rates are close to a peak got some pushback on the weekend. Fed Governor Christopher Waller said “These rates are going to stay -- keep going up -- and they’re going to stay high for a while until we see this inflation get down closer to our target. We’ve still got a ways to go. This isn’t ending in the next meeting or two.”
EURUSD traded in a 1.0276-1.0366 range. The single currency is supported by positive risk sentiment and got a helping hand from better-than-expected Eurozone Industrial production data.
GBPUSD extended Fridays gains in a 1.1745-1.1847 range but slipped in early NY trading. Traders remain cautious ahead of Thursday’s UK budget.
USDJPY traded in a 138.54-140.80 range., with losses exacerbated by the falling 10-year US Treasury yield.
AUDUSD bounced in a 0.6665-0.6720 range supported by China’s latest stimulus announcement.
The USD data calendar is empty. A speech by Fed Vice Chair Lael Brainard could reinforce the dollar has turned story if it is considered dovish.
