- CAD weakens on further declines in oil prices
- Chinese trade numbers on tap
Geronimooo! Thanks to a lack of major economic data, forex traders turned their focus to risk sentiment. Which major currencies grabbed the headlines yesterday?
The oil-related Canadian dollar was under the spotlight as oil prices continued to decline. WTI crude oil dropped to as low as $45.62, its lowest since January 2009. It also didn’t help that last Friday’s Canadian employment data missed market expectations. And since economic reports are usually backward-looking, it’s possible that we haven’t seen the full impact of decreased oil prices on Canada’s economy.
Not surprisingly, USD/CAD jumped 61 pips to 1.1966, CAD/JPY dropped by 122 pips, and EUR/CAD rocketed by a whopping 130 pips to 1.4165. Yowza!
The forex bears didn’t stop at the Loonie though. The low-yielding dollar also took hits as some traders scaled back their long dollar positions after last Friday’s NFP report. If you recall, a remarkably low wage earnings growth weakened arguments for an early rate hike from the Fed.
EUR/USD ended the session with a 47-pip gain to 1.1837 while GBP/USD closed 48 pips higher at 1.5178 and USD/CHF slipped 42 pips to 1.0145. Even the comdolls scored a few pips with AUD/USD climbing 23 pips to .8158 and NZD/USD rising by 44 pips to .7784.
Will we see risk aversion among Asian session forex traders? China is set to release its trade numbers at 3:00 am GMT. Analysts expect a 49 billion USD worth in trade surplus after showing a 54.48 billion USD surplus figure last month. Exports is expected to rise by an annualized rate of 6.0% while imports is expected to drop by 6.2%.
Weak import demand from China or an overall weakness in China’s trade numbers could affect its major trading partners, so watch this report closely for its impact on risk sentiment and price action of comdoll-related currencies.
Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.
Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!