USDCAD Supported Ahead of Yellen Testimony, US CPI Data
Published November 17, 2016
USDCAD elicited support just above the 1.3400 level as the Loonie gained on a 2% rise in oil prices
Speculation continues to swirl on whether OPEC officials can come to an agreement on oil production by the end of November
Venezuelan officials stated yesterday that there "is sufficient will among OPEC countries to take the step we need to take (to reach) a forceful agreement"
Prices rose above $46 this morning and most of this rally from Monday's lows circa $42 can likely be viewed as short covering; fundamental data out of the US has been bearish with yesterday's EIA data showing another large build of crude inventories of over 4M barrels last week
Fed Chair, Janet Yellen, testifies before Congress on "The Economic Outlook" this morning starting at 10am ET
While the Fed is widely seen as playing a less central role in market sentiment going forward, given rising inflation expectations under a Trump administration pursing large scale fiscal stimulus, it will be interesting to see if she has shifted her historically dovish outlook as much as the market may have assumed
The US releases a slew of key data this morning highlighted by CPI, housing starts, and jobless claims at 830am ET
There is a large USDCAD 500M option expiring this morning with a strike of 1.35 at the NY 10am cut and Friday sees a massive USDCAD 2.3B option also expire with a strike of 1.35, so we could see the market gravitate upwards as they come off
Canada reports October CPI on Friday as well so things could prove to be very volatile over the next two trading sessions – lots of opportunity for those who are prepared!
Charts: (1) USDCAD bias to the topside. (2) Secular USD bull markets typically last 9 years. (3) Economic Calendar.