– CAD gains as WTI oil prices rebound.
– Fears of US banking crisis fade.
– US dollar trading defensively-opens on mixed note.
USDCAD snapshot: open 1.3586-90, overnight range 1.3576-1.3615, close 1.3598, WTI $74.08, Gold $1967.52
The Canadian broke is breaking barriers and attempting to push higher in a modestly risk positive environment.
It appears that traders have adopted a “glass is half full” approach to assessing global risks. Instead of worrying that Russia plans to deploy nuclear weapons in Belarus, they are optimistic because the nukes have yet to be fired.
They are no longer concerned about the safety of US banks or worry about contagion from the collapse of Silicon Valley Bank and view the absence of bad news, as good news.
The American Consumer seems to be resiliently optimistic.
The Conference Board Consumer Confidence Index® increased slightly in March to 104.2 up from 103.4 in February as did the Expectations Index.
However, the Present Situation Index (based on consumers’ assessment of current business and labor market conditions) decreased to 151.1 from 153.0 last month.
Traders reacted to the positives and as the survey was conducted during the banking crisis while ignoring the comment that “for 12 of the last 13 months, the Expectations Index has been below 80, the level which often signals a recession within the next year.
Asian equities were in risk seeking mode after Alibaba announced it was splitting the company into six entities. The Hang Seng Index soared 2.06% While the Australian ASX index gained 0.23%.
European indexes opened with gains and continued to rise into the NY session, led by a 1.27% rise in the French CAC 40 index. S&P 500 futures indicate a robust open on Wall Street.
EURUSD traded in a 1.0819-1.0871 range due to month-end and quarter-end US dollar selling and by hopes the Fed pauses rate hikes, even as the ECB commits to further rate increases.
GBPUSD climbed to 1.2361 from 1.2306, mirroring EURUSD moves but getting an added lift after Goldman Sachs lowered its EURGBP forecast. Goldman believes the UK economy will grow faster than expected and that report, combined with month-end flows is supporting the currency pair.
USDJPY rose from 130.77 to 132.25 in NY, tracking gains in S&P 500 futures with month end flows playing a role.
AUDUSD came under pressure after a weaker than expected February inflation report raised expectations that the RBA could leave rates unchanged at next week’s meeting rather than hiking 25 bps as previously expected. AUDUSD traded negatively in a 0.6663-0.6712 range.
There are no top-tier US or Canadian economic reports today.