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Posted by OFX
United States Dollar
The US dollar index is weakening slightly this morning after FED Chair Jerome Powell signaled that there is no definite time limit to the current pause on interest-rates hikes in a wide-ranging interview on CBS News’ “60 minutes” yesterday. However, Powell said the outlook for the US economy is favorable, and he highlighted risks to global growth from China, Europe, and Brexit. Powell also commented last week about the need to set a “high bar” for any fundamental change to its inflation targeting strategy, as a debate heats up within the US central bank over ways to boost its capacity to fight downturns.
Regarding economic data, the retail sales month to month came in at 0.2 percent when the expected number was 0 percent. Additionally, the retail sales excluding autos and gas for January came in at 1.20 percent versus the 0.60 expected. However, Powell’s latest comments are weighing more on the US dollar this morning. The US dollar has fallen 0.1 percent at the time of this writing.
Canadian Dollar
USD / CAD Expected Range: 1.3365 – 1.3450
The Loonie is trading flat this morning, despite that the cost per barrel of crude oil for April delivery was gaining ground to trade at US $56.50 this morning as Saudi Arabia is set to extend deeper-than-agreed cuts into next month. An official familiar with the policy said the country would provide its clients with significantly less crude than was requested. The cuts are part of a broader OPEC agreement that aims to prevent supply gluts.
Technically speaking, the USD/CAD is trading in a consolidation mode after all the gains that pushed the pair from above 1.3300 handle on Monday, March 4th, towards 1.3467 last Thursday, March 7th. We should expect the Loonie to trade quietly this week because there will not be much economic data released until Thursday (housing data set) and Friday (manufacturing sales numbers).
Euro
EUR / USD Expected Range: 1.1213 – 1.1269
The Euro rout continued right up until the end of last week as it fell against the USD in the previous four days. On top of this, the currency pair also had dropped below the 1.1200 handle for the first time since the middle of 2017. The dovishness seen from the European Central Bank last week was also exacerbated by many of their key officials saying that growth forecasts could still be too optimistic.
This morning, the German industrial production month over month came in at -0.8 percent versus the +0.50 percent expected. This German industrial data for January doesn’t only add to the current global doom; it’s also a further hit to any optimism about growth in the Euro zone’s largest economy.