- September 28, 2018
- Posted by: Joey Benedid
- Category: Market News
The Dollar Index continues to see broad gains following the FOMC on Wednesday, however CAD has been pushing back this morning and is erasing the losses it saw yesterday against the Southern Dollar. This morning saw the release of CAD GDP (2.4% vs 2.2%), which beat expectations by 0.2%. Combining earlier momentum and positive numbers out of Canada, CAD continues to rally against its American counterpart. The BoC will hold a rate decision in October, and Poloz and co. are under pressure to raise rates, even prior to the better than expected GDP numbers from this morning. While the BoC has raised rates four times since July 2017, there has been some hesitancy to as of late due to geopolitical tensions and obvious trade concerns with a NAFTA deal still not on the table. The US saw Personal Consumption Expenditure Core (2.2% vs 2.0%) which beat expectations, however investors were tuned in more closely to numbers North of the border. Americans also appear keenly focused on the Kavanaugh probe, which has dominated US headlines.
EUR is down this morning, as economic policy uncertainty in Italy continues to weigh down the single currency. Eurozone CPI and German unemployment numbers showed mixed results, preventing any sort of aid to the EUR slide. GBP also remains weak after this morning’s GDP missed expectations, coupled with ongoing Brexit woes.
Short term support and resistance is 1.2885 and 1.3080 respectively, with RSI falling to 50 and the 200-day moving average residing at 1.2869.