Morning Commentary & Currency Insights – October 5, 2018

The Dollar has remained steady this morning as we await jobs numbers out of Canada and the US at 8:30am. The US economy is expected to add 185k jobs (vs last month’s 201k), but that number may be distorted due to Hurricane Florence’s impact on parts of the Eastern Seaboard. Investors are keeping an eye out for signs of raising inflation though as companies (most notably Amazon) are raising their minimum wages. Powell has stated that the US economy is in great shape and that the Fed will continue on the current trajectory in regards to interest rate decisions. Canada will also see employment data this morning, with the Loonie looking to make up some lost ground over the past two days. In addition to cleared trade uncertainty with the completion of USMCA, oil has helped support CAD as we saw the highest levels since November 2014.

EUR is neutral after Italian budget concerns cleared up and a lack of primary data has kept the single currency in check. Sterling received a boost yesterday after Ireland backed Theresa May’s vision of a UK customs union for life after Brexit. GBP continued to rise today with reports indicating that EU Brexit negotiators are very close to a divorce deal with Britain.

Short term support and resistance is 1.2855 and 1.3020 respectively, with RSI at 46 and the 200-day moving average residing at 1.2874.

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