As earnings are starting to be released, equity markets are slowing selling off, analysts are unsure if this round of reports will be as good as anticipated. Oil has fallen below $70 USD a barrel on West Texas Intermediate on continued comments Saudi Arabia that it will fill in any void left by Iran and other current disruptions.
Tomorrow Canada has manufacturing sales which is expected to be a down number, so if there is a plus to this number, then the CAD will likely improve.
Expect a narrow range today.
XE Market Analysis: North America – Jul 16, 2018
[USD, CAD]
USD-CAD has settled near 1.3150 after posting a three-week low at 1.3066 last Monday, which extended the correction from a one-year high that was pegged at 1.3387 in late June. The BoC’s 25 bp interest rate hike, last Wednesday, and guidance for tighter monetary policy to keep inflation near target met expectations, with the statement emphasizing a “gradual approach, guided by data.” A big dive in oil prices, as Libya announced recommencing supply, and Trump touted the possibility of tapping into the U.S. Strategic Petroleum Reserve, brought some selling pressure onto the Canadian dollar, given the sensitivity of Canada’s terms of trade position to crude prices.
[EUR, USD]
EUR-USD popped above 1.1700 for the first time since last Wednesday, making a high of 1.1711, while EUR-JPY lifted to a fresh 10-week high of 131.58. We retain a bearish view of EUR-USD based on strong U.S. economic growth and the Fed’s tightening course, while any move from Trump to follow-through on hits threats to tariff car imports — which he looks to be gearing up for, describing the EU as a “foe” over the weekend — would also be negative for the Euro relative to the Dollar. EUR-USD has support at 1.1645-47, and resistance at 1.1720.
[USD, CHF]
EUR-CHF has printed seven-week highs above 1.1700. SNB’s Maechler said late last month that the franc “remains highly valued” despite the depreciation seen over the last year, arguing that “we are in extraordinary times and we are using unconventional measures.” The commáents affirm that the SNB is firmly on hold, with Maechler admitting that the SNB’s monetary policy room for manoeuvre is “necessarily” affected by the actions of ECB and Fed.
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