This morning’s GDP data was a lot better than anticipated, Canada’s second quarter looks to come in at over 2%. Oil prices have moved even higher, West Texas Intermediate is over $74 USD a barrel, up 0.82%, its largest weekly gain in two months. Two main factors are driving higher prices, lower inventory numbers and the fact that increased U.S. sanctions on Iran will cut Iranian oil output.
The Canadian dollar has rallied on this news as there have been no tweets emanating from Washington, the market is starting to trade of the fundamentals and technical data. This now puts the Bank of Canada in the position of hiking rates on July 11th, unless something dramatic changes, but then the past two weeks have been pretty dramatic anyway.
Support Resistance
USDCAD 1.3117, 1.3085, 1.3076 1.3175, 1.3212, 1.3255
XE Market Analysis: North America – Jun 29, 2018
[USD, CAD]
USD-CAD posted its biggest single day drop in a month yesterday in tumbling to the lower 1.3200s, extending from a one-year high that was pegged at 1.3387 on Wednesday. BoC Governor Poloz showed himself to be very much in want of further rate hikes, in a speech and Q&A session on Wednesday. The big surge in oil prices over the last week, has also been a prop for the Canadian dollar. USD-CAD has resistance at 1.3280, and support at 1.3210-11.
[EUR, USD]
The euro has been the strongest currency on the day out of the units we keep tabs on, off highs but still showing a 0.7% gain on the dollar and a 0.8% gain no the yen, as of the noon in Europe. News that EU members have thrashed out deal on immigration (to shore up external borders and create screening centres for migrants) has reduced the discount built into the common currency on existential threat grounds, as the deal should placate the Italian populist government and broader Eurosceptic, populist movements across the region. EUR-USD rallied over a big figure in making a two-day high at 1.1666. The pair yesterday posted an eight-day low at 1.1727. Bigger picture, the pair remains in broadly consolidative phase after a downtrend from mid-April levels above 1.2400. The range over this phase has been 1.1508 to 1.1851.
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