Morning Commentary & Currency Insights – January 23, 2018

The dollar index continues to trade in a sideways fashion but whippy movements in several G10 currencies continue to exacerbate the market psyche with major events such as German Coalition talks, U.S Government shutdown/reopening & the BoJ rate decision having come and gone.  While no major surprises came to fruition, the market’s susceptibility to headlines surrounding proceedings such as these is resulting in sharp volatility that actually ends with little change over the course of the day.  Tomorrow’s ECB rate announcement is the next event on tap tomorrow with no change expected.

USD/CAD is trading marginally higher as we head towards another round of NAFTA meetings in Montreal next week.  Once again, the market will be vulnerable to “headline bombs” with some calling for the Canadian dollar to weaken as much as 5% if the U.S. pulls out of the agreement or, conversely, strengthen 2-3% on a signed agreement.  Whatever the result is, volatility & uncertainty will create difficult trading conditions.  Leave orders to take advantage of silly moves.