The dollar firmed against the major currencies in early trading today. This followed the release of Fed minutes which showed that officials sounded more upbeat about the US economy. These sentiments bolstered analysts’ estimates that more rate hikes were coming. After the release, the dollar index which tracks the dollar against major currencies rose to the highest level since February 13. Traders now expect the Fed to raise rates in their March meeting.
This week, the euro index which tracks the euro against major currencies fell by 0.52%. Part of the reason for this fall was the stronger dollar. Today, traders will watch for key economic data from key European countries. In France, we will receive inflation data while in Italy, we will get industrial and inflation data. In Germany, business sentiment about the economy is also due out. The Euro index is now trading at a weekly low of 108.19.
The Canadian dollar has been in free fall this week, dropping by more than 1.66% against the dollar. Like in most currency pairs this week, the fall of the pair is associated with a stronger dollar. Today, with insignificant data coming from the United States, traders will focus on retail sales from Canada. They expect core retail sales to grow by 0.1% compared to December’s 1.6%. They also expect retail sales growth to drop from 0.6% to 0.05.
EUR/USD
The EUR/USD is trading at the 1.2276 level, which is near a two-week low. Still, the downward trend seems not to be over. As shown below, the RSI of the pair is currently near the oversold level while the Bollinger bands show that more downside could happen. The next price target for the pair is possibly at 1.2205.
USD/CAD
The USD/CAD is trading at 1.2695, which is the highest level since January 27. The pair’s upward trend is more about a stronger dollar and the doubts about the future of NAFTA. As shown below, possibly, the end of this rally could be close since the RSI is near the overbought territory while the Bulls power is diminishing.
EUR/GBP
The EUR/GBP pair has traded sideways in the last few days. As a result, the pair is currently trading at its 25-day and 14-day moving average level of 0.8825. This shows that the pair could break out in either direction. Today’s data from the EU, and the GDP data from the UK coupled with Brexit talks could determine how the pair moves.
