Forex today: CAD and GBP stole the show dollar double topped out - FXStreet

While the US bond and stock markets were closed, forex today was concentrated firstly on sterling following a European bid, then with the BoC and the price of oil.
Oman oil minister said and then all OPEC+ members appear to be on board for a cut before newswires came through that OPEC could only agree to 1mbpd cut from Sept or Oct levels
The Canadian dollar was shot after the Bank of Canada's dovish statement when leaving rates unchanged at 1.75%, as expected.

The US dollar was a sideshow on Wednesday, although it obviously drew in some interest on the back of a double top test of the 97.20 while interest rate markets were closed having stablised the previous day at the lest levels since early September.

GBP

Instead, traders were focussed on developments in London with respect to the lead into 11th Dec Brexit vote in The Commons. Today, the pound got a lift on a legality whereby Brexit might not happen at all if the vote goes to a second referendum in the UK public. May's the government was defeated on two contempts of Parliament motions for not publishing the full legal advice on the withdrawal agreement. Backbenchers approved an amendment which gives them a greater say if the Brexit proposal is defeated in next week's meaningful vote and JPMorgan moved its odds on the possibility of Britain remaining in the EU to 40% from 20% and said it now sees the chances of a no-deal Brexit at 10%, reduced from 20%, and an orderly Brexit at 50% now versus 60% before. Pro-Brexit International Trade Secretary Liam Fox proclaimed at a parliamentary committee that no Brexit was now a possibility. Sterling rallied towards 1.28 the figure on the news. It had been as low 1.2724.

CAD

Then the focussed moved over to the Loonie with the BoC expected to leave rate son hold but deliver updates to its statement which was expected to be less hawkish than the one released last October considering the deterioration in the global economic picture and slumping commodity prices, specifically oil that has dropped 30% in value since October. The BoC seems to be considering downgrading its 2019 Canadian GDP growth forecast in the upcoming Monetary Policy Report although left the door open to a January rate hike, of which following the concerns reflected in the statement over business investment, the price oil, ("activity in Canada’s energy sector will likely be materially weaker than expected"), and global trade/demand,("signs are emerging that trade conflicts are weighing more heavily on global demand"), the likelihood of a rate hike has probably diminished by at least 50% sending the Loonie down to 1.3399$, CAD’s weakest point since June 2017. It has been at 1.3272 in early NY prices.

On the sidelines of that, WTI whipsawed on OPEC expectations and possible lower liquidity

Other currencies

Elsewhere, the single unit was stuck in a sideways drift between 1.1320 and 1.1360, the USD/JPY climbed from 112.70 in early Asia yesterday to 113.20 overnight. Following the GDP miss, AUD/USD was the weakest G10 currency on the day and was extending the downside from 0.7300 post-data to 0.7260/70. The kiwi also swooped lower to 0.6893. AUD/NZD extended its four-month-old decline to 1.0516 then steadied around 1.0540.

Key notes from US session

Key risks for Asia

Analysts at Westpac explained that Australia’s huge week of official data concludes at 11:30am Syd/8:30am Sing/HK with October retail sales and international trade:

"Following the disappointing reading on Q3 household consumption in the national accounts yesterday, Westpac looks for a subdued start to Q4, with nominal sales up only 0.1%mth, 3.3%yr. The consensus is 0.3%mth.

Australia’s trade position has been in surplus since January, averaging A$1.7bn, with September seeing a whopping $3.0bn surplus. Westpac looks for an even stronger outcome in October, A$3.5bn (consensus $3.0bn), driven by a 2.2%mth rise in exports, outpacing 1.0% on imports. Coal export volumes should rebound from supply disruptions and commodity prices were higher over the month (November should be less favourable).

RBA deputy governor Debelle speaks from 8:05pm Syd/5:05pm Sing/HK on “Lessons and Questions from the GFC” at the Australian Business Economists annual dinner in Sydney. No doubt in the Q&A he will be asked for his view on how the weak GDP data yesterday aligns with Tuesday’s statement which said the “Australian economy is performing well.”"

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