- BoC’s Governor Poloz stated that they will watch exchange rate movements, which made the Loonie collapse yesterday.
- His tone was overall cautious and with no Canadian data being released until Friday, the Canadian dollar could remain lower.
- USD/CADsurged following Poloz’s statement, emerging above 1.2430(S1). Right now the rate seems to be going for 1.2535(R1) and if broke, could hit 1.2600(R2).
USD apathetic to Trump’s tax plan
- Yesterday, President Trump revealed a draft of his plan and almost all of it was as reported recently. The plan, which includes a one-time repatriation of corporate cash abroad at a low rate, got a very limited reaction from the USD.
- We don’t see the Dollar having a smooth ride over the coming months with headlines relating to tax, probably coming out.
Maintaining their neutral bias, the RBNZ stands pat
- The RBNZ keeps policy unchanged, with the policymakers having a softer tone noting that a low Kiwi could “Help” the economy.
- The NZD path most likely depend on upcoming developments of their election, but traded higher yesterday but was limited below 0.7245(R1) then slipped to 0.7185(S1).
As for today:
- Germany’s preliminary CPI for September, ahead of the Eurozone’s print. We also get the US’s final estimate of Q2 GDP, not going to have major affect.
- Speakers today include ECB executive board members Peter Praet and Sabine Lautenschlager and in the US Fed Vice President Stanley Fischer.
- Support: 1.2430 (S1), 1.2335 (S2), 1.2250 (S3)
- Resistance: 1.2535 (R1), 1.2600 (R2), 1.2660 (R3)
- Support: 0.7185 (S1), 0.7140 (S2), 0.7055 (S3)
- Resistance: 0.7245 (R1), 0.7295 (R2), 0.7340 (R3)