The dollar has consolidated post-FOMC minutes losses, which didn’t show any heightened risk for a March rate hike, and saw implied rates dip as some insurance for a more hawkish tone had been priced in. Risk for action next month fell to about 18% in Fed funds futures, versus about 25% to 30% last week after strong data and some hawkish Fedspeak. This backdrop inspired some dollar selling, though not much, and which didn’t follow through into the Asian session. EURUSD lifted to highs just above 1.0570 in the wake of the minutes, with the euro also benefiting from news from France that former presidential candidate Bayrou will back Macron, which is seen as diminishing the chances of Le Pen at the April election. The pair since settled, with 1.0544 marking the consolidation low, comfortably above the six-week low seen earlier yesterday at 1.0493. USDCAD has settled lower today after yesterday foraying further into two-week high territory, clocking a peak at 1.3210. That marked the fourth straight higher high thee pair has seen. The pair closed yesterday well off its high, however, following U.S. dollar weakness in the wake of the FOMC minutes.

On the other hand, EURCAD failed to sustain gains above its 200-day moving average at 1.389, since late yesterday. On the hourly chart, the shorter term MACD has turned earlier today and shows signs of negative move. The Parabolic SAR remains negative and the RSI is neutral at 45. The, pair manage to brake the lower Bollinger bands pattern, as can been seen by the last two candle. On a Higher timeframe, 4-hour chart, EURCAD broke the 50-period MA earlier, indicating further weakness.

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Andria Pichidi

Market Analyst


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