With Canada's CPI falling sharply, should we watch the direction of the Canadian dollar?
21.02.2024
- UK Public Sector Net Debt
- U.S. MBA Mortgage Applications Index
In yesterday’s U.S. currency trading, the Canadian dollar plummeted against the yen after Canada’s January Consumer Price Index, released yesterday, showed a significant year-over-year decline from 3.4% the previous month to 2.9%. The CAD/JPY pair fell from 111.432 to 110.669.It broke below the 200-period simple moving average (SMA) on the hourly chart. On the 4-hour chart, the 75-period SMA is acting as a support level, and the pair has rebounded during today’s Asian session, so we should watch for a potential price reaction during U.S. trading hours.
European currencies saw the euro emerge as the strongest currency during U.S. trading hours after yesterday’s release of December construction output data for the Eurozone showed an improvement from a year-over-year decline of 2.2% in the previous month to a 1.9% increase. The euro rose against the U.S. dollar from 1.0761 to 1.0838, breaking above the 200-day simple moving average (SMA) on the daily chart.The daily RSI is showing an upward trend at 48.5, so we will be watching closely to see if further gains will follow.
Today’s economic indicators include Japan’s trade balance (customs-based) at 8:50, Australia’s wage index at 9:30, the UK’s net public sector debt and Turkey’s consumer confidence index at 16:00, Indonesia’s 7-day reverse repo rate at 16:20,at 5:00 PM, South Africa’s Consumer Price Index; at 9:00 PM, the U.S. MBA Mortgage Applications Index; at 10:00 PM, remarks by Bostic, President of the Atlanta Fed; at 3:00 AM, the U.S. 20-year Treasury auction; and at 4:00 AM, the release of the FOMC minutes. We will closely monitor the direction of the Canadian dollar, which fell sharply following a significant decline in Canada’s CPI.
Author: Keisuke Sakurai
