FX TALKING POINTS:
- USD/CAD[1] Rebound Stalls, Bearish Sequence Take Shape Following Lackluster U.S. Data. Bank of Canada (BoC) Rhetoric on Tap.
- NZD/USD[2] Remains Under Pressure Ahead of New Zealand Employment Report. Relative Strength Index (RSI) Continues to Flirt with Oversold Territory.
The Canadian dollar outperforms its major counterparts, with the USD/CAD[3] rate at risk for a larger pullback, while the New Zealand dollar[4] stands at risk of facing near-term headwinds as the region’s employment report is expected to show a slowdown in both job and wage growth.
USD/CAD REBOUND STALLS, BEARISH SEQUENCE TAKE SHAPE FOLLOWING LACKLUSTER U.S. DATA.
The recent rebound in USD/CAD appears to have stalled ahead of the April-high (1.2944), with the exchange rate at risk of giving back the advance from earlier this month as a bearish sequence takes shape.
USD/CAD struggles to hold its ground as the marginal pickup in the U.S. core Personal Consumption Expenditure (PCE)[5] paired with the slowdown in Pending Home Sales does little to boost bets for four rate-hikes in 2018, and the Federal Open Market Committee[6] (FOMC) may revert back to a wait-and-see approach at the May meeting in an effort to combat the ongoing slack in the real economy.
Keep in mind, Bank of Canada (BoC) Governor Stephen Poloz is scheduled to speak tomorrow at the Yellowknife Chamber of Commerce, with the central bank head likely to tame speculation for an imminent rate-hike as ‘some monetary policy accommodation will still be needed to keep inflation on target.’
However, Governor Poloz may ultimately
