Article / 12 March 2018 at 21:48 GMT

US Wrap: Forex traders sidelined ahead of release of US inflation data

FX Trade Strategist / www.Loonieviews.net
Canada
  • US dollar drifted sideways ahead of the release of inflation data for the US
  • The inflation data could decide if EURUSD retests support or starts to rebound
  • Treasury yields ticked lower as Wall Street closed on a mixed note 
  • Crude oil prices slipped and gold recovered earlier losses
By Michael O’Neill

NY Focus: Traders were a tad groggier when they got to work due to the shift to daylight savings time. Sleepy traders and an empty data cupboard made for a somnolent session for financial markets. Traders were content to see if the pending inflation data complements the stellar nonfarm payrolls report.

EURUSD inched lower in the early morning, then ticked higher until the close, trading in a range between 1.2291 and 1.2344. GBPUSD bottomed out early and climbed steadily, rising from 1.3842 to 1.3916. USDJPY bounced inside a narrow band between ¥106.32 and ¥106.62.

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Trump’s decision to link exemptions to his hefty tariffs to a renegotiation of the NAFTA trade deal between Canada, Mexico and the US has impacted FX markets. Photo: Shutterstock

The antipodean currencies eked out tiny gains while USDCAD failed to break support at 1.2810. President Trump’s decision to tie the tariff exemptions to a successful renegotiation of the NAFTA trade pact has limited any USDCAD downside.

Traders on Wall Street couldn’t decide if they wanted to buy or sell stocks. So they did both. The Nasdaq closed with a small gain thanks to tech stocks, while the Dow Jones Industrial Average lost ground due top NAFTA concerns.

Thursday Focus:
The US CPI release for February (which is forecast at 2.2%, up from 2.1% in January, y/y) will determine if EURUSD retests support in the 1.2160-1.2200 area, or sparks a rebound to 1.2340.

Four-hour EURUSD chart
saxo
 Source: Saxo Bank. Create your own charts with SaxoTrader; click here to learn more.  

– Edited by Robert Ryan

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Michael O'Neill is an FX consultant, currency strategist and author of the Trade of the Day at Loonieviews.net. Follow Mike or post your comment below to engage with Saxo Bank's social trading platform.

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