- Global equities modestly higher following Fed Powell comments
- Hostile Russian rhetoric leaves EURUSD on the defensive
- US dollar opens with small losses compared to Thursday
USDCAD Snapshot: open 1.2938-42, overnight range 1.2897-1.2980, previous close 1.2908, WTI open $109.86, Gold open $1,800.52
The Canadian dollar got lucky on Friday the 13th. Instead of falling off the cliff as it threatened, the Loonie rallied hard and continued to rally in early Asian trading today.
USDCAD dropped from 1.3074 Friday to 1.2897, then bounced sharply to 1.2980 in Asia. Prices retreated steadily in Europe due to a mix of improved risk sentiment and higher oil prices. The technical picture suggests that the USDCAD sell-off is just a correction unless there is a decisive break below 1.2870.
Weaker than expected Chinese data spooked Asia traders. April Industrial Production fell 2.9%, well below the forecast for a 0.7% increase and the March result of 5.0%. Retail Sales dropped 11.1% (forecast -6.0%, March -3.5%), which exacerbated concerns of a sharply slowing Chinese economy. However, the results are skewed by the COVID-19 lockdown in Shanghai.
Asian equity markets closed on a mixed note. Japan’s Nikkei 225 index managed a slight 0.45% gain, and Australia’s ASX 200 rose 0.25%. The Shanghai CSI 300 index dropped 0.80%. European bourses are in negative territory, albeit relatively modestly. S&P 500 and DJIA futures are in the red, and gold has lost 0.54%.
West Texas Intermediate (WTI) oil rallied from $110.15 to $111.67 before sliding to $109.60/b in NY.
Prices are underpinned by Russian threats to cut-off energy supplies to Sweden and Finland after those country’s said they planned to join NATO.
EURUSD traded in a 1.0390-1.0437 band. The EU lowered growth and inflation forecasts for 2022. They now predict GDP at 2.7% (previously 4.0%) and hiked the inflation forecast to 6.1% from 3.5%.
GBPUSD chopped around in a 1.2219-1.2296 band. The UK inflation outlook, the ongoing EU/UK Brexit issues will overshadow Tuesday’s UK employment report. GBPUSD technicals are bearish below 1.2300.
USDJPY traded in a 128.71-129.63 range. Prices climbed when the US 10-year Treasury yield rose from 2.88% to 2.918%.
NZDUSD outperformed AUDUSD and is at the top of its 0.6231-6291 range. Both currency pairs are supported by improved risk sentiment.
There are US economic reports of note today.
