- FX markets remain cautious around US/Iran nuclear talks.
- Canadian and US economic calendars are light.
- US dollar grinds out small gains overnight.
USDCAD open: 1.3681, overnight range 1.3659-1.3681, close 1.3677, WTI 64.39, Gold 5171.27
The Canadian dollar drifted aimlessly in ana quiet overnight session. FX markets are looking for a catalyst and are keeping a wary eye on the Iran and US nuclear talks in Geneva. Betters on Polymarket do not expect the Americans to attack in the near term and the odds of an attack at the end of March are only 54%. That has helped ease pressure on oil prices.
WTI oil dropped from 65.85 to 63.93 just before NY opened. Prices are also weighed down by rising US crude inventories which rose by 15.98 million barrels last week.
Asian equity markets finished the session mixed. Japan’s Topix advanced 0.97% and Australia’s ASX gained 0.52%, while Hong Kong’s Hang Seng declined 1.44%.
At 7:00 a.m., European markets were modestly firmer. France’s CAC-40 was up 0.88%, Germany’s DAX gained 0.38%, and the UK FTSE 100 edged higher by 0.12%. S&P 500 futures were little changed. The US Dollar Index was at 97.73, the 10-year Treasury yield stood at 4.052%, and gold was trading at 5,164.85.
EURUSD moved within a 1.1771-1.1829 band as broad US dollar demand kept rallies contained. Eurozone Economic Sentiment held steady at 98.3. Some analysts argue that the recent pullback reflects caution rather than a material shift in trend. Near-term technical indicators remain constructive while prices stay above 1.1740.
GBPUSD slid from 1.3575 in Asia to 1.3517 as renewed demand for the US dollar followed Nvidia’s quarterly earnings release in New York. The move gathered pace after BoE MPC member Megan Greene suggested that mirroring the Fed’s policy path may not be appropriate, implying the Bank of England could take a different course.
USDJPY eased from 156.47 to 155.71 after Bank of Japan Governor Kazuo Ueda reiterated that rates would increase if economic projections are met. He indicated that policymakers do not need to wait for the April Tankan survey to act, leaving open the possibility of a near-term move.
AUDUSD traded between 0.7110 and 0.7137, reaching a high in Asia before slipping to the session low in early New York dealings. The currency continues to find support from expectations that the RBA may tighten policy again after stronger-than-anticipated inflation data. The pair is trading near levels last seen in early January 2023. A sustained break above 0.7160 would expose the 0.7280-0.7300 zone.
There are no actionable US and Canadian economic releases today.
