Morning Commentary & Currency Insights – January 10, 2019

Very quiet session in Asia overnight after yesterday’s active North American session where the market’s perceived FED minutes to be dovish and sold the USD across the board.  FED Chair Powell is due to speak this afternoon at the Economic Club of Washington DC which may sustain pressure on the USD today. Expectations for a positive outcome on US/China trade talks are at fever pitch but expect any announcements to be positive but not at the high end of hopes.

CAD rallied initially after the BoC said rates still need to “normalize”, briefly creating thoughts of rate hikes in the near future.  These hopes were quashed moments later with uncertainties surrounding oil and global trade tensions were highlighted more emphatically, bringing some reality to the market’s perception.  USD/CAD dipped below 1.3200 but settled in above that level for the remainder of yesterday’s session.  The 1.3250 area will act as a short term pivot point as we head into the end of the week with no Canadian data due out until a week from Friday.  Until then we will follow general market themes and take our queue from oil & equity moves.