The Canadian dollar rallied on better news from the NAFTA talks, comments from US trade representative, Lighthizer, he believes that a lot of progress has been made and that the US is open to further free trade deals. Oil is off a little, however its impact has been minimal today. Yesterday the Fed hiked rates by a 0.25%, fully expected, it reiterated that there were still further hikes to come in 2018 and it may hike also in 2019.
Expect a quiet session, tomorrow’s Canada CPI and Retail Sales will likely have an impact.
Support Resistance
USDCAD 1.2905, 1.2895, 1.2875 1.2949, 1.2957, 1.2970
XE Market Analysis: Asia – Mar 21, 2018
[USD, CAD]
USD-CAD was weighed down early by reports that the U.S. may drop contentious auto content demands in NAFTA talks, which took it to 1.2963 from 1.3054 highs ahead of the open. The pairing subsequently bounced to 1.2993 on a round of short covering, before dropping back to 1.2946. USD-CAD was capped ahead of the Fed announcement as WTI crude rallied to seven-week highs of $64.89. The pairing bottomed at 1.2914 after the FOMC rate hike.
[EUR, USD]
EUR-USD had been on the decline ahead of the FOMC, dropping to 1.2268 lows from earlier highs of 1.2296. Talk of selling out of long euro positions into the FOMC announcement was heard, while the Bund/T-note spread continued to widen in favor of the dollar, out to 232 basis points, and within range of all-time wides of 235 basis points. Adter the rate hike, the pairing turned choppy, ranging between 1.2251 and 1.2320.
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