Morning Commentary & Currency Insights – April 19, 2018

Following yesterday’s BoC Rate Decision, CAD swooned on concerns over the housing market and that the economy is not yet able to stay at full capacity on its own, needing accommodations in policy to allow for inflation targets to meet ongoing expectations. While we did see investors gravitate to USD, the pair has fallen back into the high end of the previous ranges. Trade tensions are back in the news, with aluminum and steel tariffs making headlines. Trump and Japanese Prime Minister Shinzo Abe met this week in the Florida to discuss a bilateral agreement between the two nations that would see these aluminum and steel tariffs lifted for Japan. With both commodities trading higher, oil is following suit with WTI reaching $69/barrel, inching closer to the $80/barrel mark that Saudi Arabia signaled last week. OPEC will be meeting April 20^th to indicate an extension of its supply cuts  in Saudi Arabia. Sterling fell slightly on weaker than expected retail sales, providing more doubt on the BoE’s monetary policy. Sterling was also soft on lower UK Inflation numbers which fell down to 2.5%, the lowest in a year.

Thursday is a quiet day from an economic release standpoint with no major releases scheduled for today. Tomorrow we will see Canadian CPI numbers and retail sales data. Short term support and resistance for USDCAD are 1.2560 and 1.2676 respectively. RSI currently sits at 39, still within a neutral range and 200-day moving average residing at 1.2612.