- WTI oil prices under pressure, limiting CAD gains.
- US Q! GDP is expected at 2.0%.
- US dollar opens mixed after trading narrowly overnight.
USDCAD snapshot: open 1.3632-36, overnight range 1.3618-1.3644, close 1.3636, WTI $74.35, Gold $1996.78
The Canadian dollar is underperforming against its commodity bloc peers due to lower oil prices. West Texas Intermediate (WTI) continued its slide and completely filled the price gap that occurred between the Friday March 31 New York closing price and the April 3 Asia open.
That’s when Opec surprised global markets by announcing an additional 1.1 million barrel per day production cut which they said was needed to “stabilize prices.” WTI closed at $74.37/b on March 31 and hit $81.50 at the Asian open. Nature and traders abhor a vacuum, and the $7.13 price gap has been filled.
The negative oil pressure offset the slightly positive risk sentiment that occurred in early Asian hours overnight, thanks to Meta’s quarterly earnings result. Wall Street closed negatively as plunging First Republic bank shares renewed concerns about a US banking crisis. Meta reported a 3.0% rise in quarterly earnings, easily beating analyst forecasts and banking woes were forgotten.
The major Asian equity indexes closed higher except the Australian ASX 200 which fell slightly. European equity markets just above unchanged but still in positive territory, while S&P 500 futures have gained 0.50%.
The US economy is expected to have grown by 2.0% in Q1.A higher than expected result could see the US rebound as it suggests that the economy can withstand a more hawkish than expected Fed interest rate outlook.
FX activity is quiet heading into month end and the FOMC meeting on Tuesday.
EURUSD traded uneventfully in a 1.1035-1.1063 range. Euro area Economic Sentiment was broadly unchanged, which helped to support prices.
GBPUSD traded quietly in a 1.2442-1.2487 band supported by bullish GBPUSD technicals targeting 1.2550.
USDJPY is steady in a 133.40-133.94 range with traders biding their time until the Bank of Japan monetary policy meeting as some analysts worry about the risk for a hawkish tweak to the statement.
AUDUSD got a boost from Commonwealth Bank of Australia (CBA) Chief Economist Gareth Aird’s comments which supported prices in a 0.6601-0.6634 range. He predicted that the RBA would raise rates by 25 bps at the May 2 meeting.
Today’s US data includes Q1 GDP, weekly jobless claims, and pending home sales.