In early morning trading, the EURUSD and GBPUSD have bounced off yesterday’s lows with the EURUSD trading just below 1.3200 and the GBPUSD at 1.5810. However, yesterday’s big losers, the commodity currencies, continue to see selling pressure. Dropping them yesterday was a worse than expected Manufacturing PMI number from China that raised fears that the fastest growing country in the world will be slowing its commodity purchases.
Looking ahead, commodity currencies will stay in focus today as the only important economic release today is Canadian CPI. Core CPI is expected to rise to 0.3% from 0.2%. However, after last week’s drop in US CPI last month, Forex traders will be watching to see if sluggish Canadaian Retail Sales figures will impede any growth in the overall CPI number. Going into today’s CPI announcement, the USDCAD is trading just above the 1.0000 parity level to 1.0005, and is well above its week low of 0.9855.
For more on the upcoming data and the Canadian Dollar from Reuters
Canadian retail sales rose by much less than expected in
January and would have fallen had it not been for a healthy auto
sector. "Let's face it - Canada is highly correlated with what's
going on in the U.S. and Canadian consumers are extended," said
Tom O'Gorman, director of fixed income at Bissett Investment
Management in Calgary. "It was definitely disappointing," he added, but noted the
Canadian currency was mostly following the trend in equity
markets, which slipped on global manufacturing data that showed
a drop in new orders in both the euro zone and China. Read More