Dollar Gains Initially Extended, But Now Awaits US Leadership

The US reports February durable goods orders, and a more moderate gain is expected after the 3.4% surge in January. Core orders, which exclude aircraft and military orders, rose 0.4% in January and are forecast to have risen by 0.5% in February. If the expected decline in core shipments materializes, some Q1 GDP forecasts may be shaved. Separately, the preliminary PMI is expected to have risen. More Fed-speak today with Barkin, Williams, Daly, and Evans on tap. Powell and Yellen are before the Senate Banking Panel today. Their answers will be the same as yesterday, even if the questions change. Canada's economic diary is light, while Mexico reports the bi-weekly CPI, which is expected to tick up to 3.9% from 3.68%. If so, the market may be more confident that the central bank will not ease policy at tomorrow's meeting. Mexico also reports February unemployment figures today. It is expected to have slipped to 4.4% from 4.73%.  

The US dollar poked above CAD1.26 for the first time in nearly two weeks. That met the (61.8%) retracement objective of this month's decline, and sellers were lurking that sent the greenback down toward CAD1.2565, where the selling abated. It probably takes a move back below CAD1.2510-CAD1.2520 to improve the technical tone from here. Meanwhile, the greenback has been capped from the third consecutive session in the MXN20.85-MXN20.88 area. A push below the MXN20.68 area could see a return to the MXN20.53-MXN20.54 band that has offered support in recent days.  

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Read more by Marc on his site Marc to Market.

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