The Canadian dollar looked like it was in serious trouble on Friday, but resistance held, and prices have been consolidating since.
FX markets opened in Asia with a bout of risk aversion, which fueled safe-have demand for U.S. dollars. Traders were spooked after Turkey President Recep Erdogan fired Central Bank Governor Naci Agbal. Erdogan was incensed that the Governor hiked interest rates to 19% from 17%, last Thursday. FX traders were unimpressed, and the Turkish lira dropped over 15%.
Traders were also concerned about the latest round of measures to curb the "third-wave" coronavirus outbreak in Europe. France, Germany, and Italy were re-imposing restrictions and lockdowns in many areas. The moves were seen as more evidence that a European economic recovery would seriously lag that of the U.S. and U.K.
EUR/USD traded in a $1.1874 to $1.1910 range as European traders dismissed fears around the latest COVID-19 restrictions, and Turkey issues. There were not any economic releases of note, leaving traders to await remarks from U.S. Federal Reserve Chair Jerome Powell Tuesday, and European Central Bank President Christine Lagarde, Thursday. The EUR/USD technicals are bearish below $1.1950, looking for a break below the 200-day moving average at $1.1852 to extend losses to $1.1775.
GBPUSD is consolidating in a $1.3800-$1.400 range as the euphoria from Britain’s stellar COVID-19 vaccine program wanes.
USD/JPY traded in a 108.54-108.95 range with prices weighed down by the retreat in U.S. 10-year Treasury yields. Prices saw a bit of negative pressure from safe-have demand for yen, which has since dissipated.
AUD/USD bounced from its overnight low as safe-haven U.S. dollar demand gets unwound. NZD/USD tracked AUD/USD moves.
USD/CAD rallied to $1.2530 which also was the downtrend line from March 5. Prices retreated alongside broad U.S. dollar selling vs the majors, with a bounce in oil prices giving an assist. Crude prices are supported by comments from Saudi Aramco CEO forecasting higher oil demand in 2021.
Canadian Pacific Railway announced plans to buy Kansas City Southern Railway in a $29-billion deal, which includes stock and a $90.00 U.S./ share cash offer. The FX impact will be minimal as CPR plans to borrow about $8.6 billion. The deal still needs regulatory approval.
The U.S. and Canadian data calendars are devoid of top-tier data.
