On Thursday, global investors were eagerly waiting for ECB President to indicate dialing back of the central-bank’s stimulus but the supremo refrained from providing any such signals and rather discussed inflation threat within growing enthusiasm for EU economy. As a result, disappointed traders dumped EUR and favored US Dollar, which in-turn helped the greenback to overcome weaker than forecast Durable Goods Orders and Pending Home Sales figures. However, US Dollar’s gains were kept in check as geo-political concerns between US & North Korea rejuvenated after Donald Trump’s comment to Reuters that said chances of major conflict over Korean nation’s nuclear program are high.
Moving on, the GBP managed to strengthen on weaker EUR and strong CBI Realized Sales whereas safe-havens couldn’t register big gains with upbeat earnings report from major US firms and rising USD. Additionally, commodity currencies stretched their south-run while Crude recovered some of its early-day losses on renewed concerns relating to global production-cut.
As we come to the crucial Friday when market players are locking their hands while waiting for the UK & US GDP releases, early-day moves remained almost silent but favored safe-havens ahead of the scheduled closure to US Government shutdown during mid-night. Last time such thing happened in 2013, it took 17 days to regain the track and hence policymakers are almost ready to announce intermediate funding till September 30 and give a week’s time to house of congress to debate on Trump policies.
With fresh geo-political tensions and expected weakness in US & British GDP figures, chances of the greenback and GBP to weaken are higher but a surprise announcement from US policymakers avoiding the government shutdown & favoring Trump policies and/or higher growth numbers could help the USD to flash gains. Moreover, Crude prices are also likely to dip further towards south as two key Libyan oilfields are restrating but the CAD up-move remains doubtful over consensus favoring soft GDP mark from Canada.
USDCAD’s successful trading above 1.3600 could help the pair to aim for 1.3660 & 1.3710 resistances while AUDUSD may revisit 0.7430 with 0.7500 restricting its immediate upside. Additionally, CADJPY is also likely to keep trading down towards 81.20 & 80.85 as 82.25-30 resistance-confluence limits the pair’s near-term advances.