Canadian Dollar Update September 13, 2019 – Canadian Dollar traders not feeling lucky

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USD/CAD Open: 1.3209-1.3210 Overnight Range: 1.3202-1.3271

Oil is at $54.99 and gold is at $1,497.40. US markets are mixed today.

The short-term USD/CAD technicals are neutral-bearish. For today, USD resistance is at 1.3312. Support is at 1.3217.

The Canadian dollar may have walked under a ladder, or maybe a black cat crossed its path. Whatever the reason, and although the day is young, it looks like the currency is having a bit of bad luck on “Friday the 13th.”

The Canadian and New Zealand dollars are the only major G-10 currencies to have started today’s session with losses against the US dollar, compared to Thursday’s closing level. New Zealand’s problem stems from having a very dovish central bank and renewed AUDNZD demand. The Canadian dollar is suffering from a 6.0% drop in West Texas Intermediate (WTI) oil prices, since Wednesday.

Oil prices fell because both the International Energy Agency (IEA) and OPEC warned of a supply imbalance in 2020. Oil production will outstrip demand as the ongoing China/US trade war weighs on global growth. Rising US crude production is more than offsetting OPEC production cuts. Prices fell even though the American Petroleum Institute (API) and the Energy Information Administration (EIA) reported declines in US crude inventories for the week ending September 6.

FX traders are still digesting the impact of yesterday’s European Central Bank monetary policy meeting. The ECB acted a tad more dovish than expected. They cut the deposit rate by 10 basis points to -0.50% and announced a new round of quantitative easing. EURUSD traders crushed the currency driving from 1.1070 when the statement was released to 1.0930 during ECB President Mario Draghi’s press conference. EURUSD recouped all its losses by the end of the day. It continued to rally and touched 1.1108 in early Toronto trading. That’s because Mr. Draghi may have hinted that there may not be any more monetary policy stimulus. He said, “The implementation of structural policies in euro area countries needs to be substantially stepped up to boost euro area productivity and growth potential, reduce structural unemployment and increase resilience.”

President Trump boosted risk sentiment when he spoke about the possibility of an interim US/China trade agreement. He wasn’t overly excited but admitted that kind of deal was a possibility. Later, there were reports that China instructed local companies to start buying American farm products.

Traders are looking ahead to today’s US Retail Sales and Michigan Consumer Sentiment Index for direction. There are not any Canadian economic reports today.

Today’s Suggested Range USD/CAD: 1.3160 – 1.3260

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