OPEC continues to commit to lower oil inventories, it announced that global levels are dropping faster than expected. Yesterday’s US inventory levels fell below their five year moving average for the first time since 2014. The Canadian dollar has caught in a bit of a tug of war between higher oil prices and the Bank of Canada’s dovish comments, leaving it unchanged. Normally the CAD would be stronger based higher oil, but offsetting that is the BoC comments stating that it won’t be hiking interest rates as soon as expected. Tomorrow’s Canada CPI and Retail Sales will likely change its direction.
USDCAD 90 day simple moving average 1.2662
USDCAD 1.2595, 1.2580, 1.2560 1.2683, 12700, 1.2723
USD-CAD has settled toward 1.2600 after posting a nine-day low yesterday at 1.2660. The high was seen after the BoC policy announcement yesterday, where rates were left unchanged at 1.25%, as widely expected, and the statement indicated that the central bank would maintain its cautious stance on future policy changes, which remain data dependent. The latest price action in USD-CAD suggests a weakening in the downside trend that’s been developing over the last three weeks, from levels near 1.3100.
EUR-USD slumped to an intraday low of 1.2354 after edging out a two-session peak at 1.2400, which was meet with a pronounced wave of selling. The pair has remained comfortably off the three-week high posted on Tuesday at 1.2414 and comfortably above the two-session low posted yesterday at 1.2341. There have been little by way of data or other developments of note out of the Eurozone today. Eurozone current account data showed a narrowing in the surplus to EUR 35.1 bln in February. Yesterday’s Eurozone March HICP data showing a downward revision to 1.3% y/y from 1.4% y/y, and Tuesday’s release of a sub-forecast German ZEW survey, put a lid on euro buying as the data further developed an economic-slowing theme in the Eurozone economy. In the bigger view, EUR-USD remains near the midway levels of a broad consolidation range that’s been seen for some two months now, which has followed a 14-month rally phase from sub-1.0500 levels. More of the same seems likely, with the odds for a big-picture breakout seeming low at the present time. Near-term risks look to be skewed to the downside. Initial support is at 1.2325-26.