April 03, 2018
Yesterday funds traded higher as equities melted down and ran into some pretty good selling interest between 1.2920-50. This morning the picture is much rosier for CAD and MXN as equities steady on talk about a preliminary NAFTA deal as early as next week at the Summit of the Americas. Apparently President Trump is pushing for the deal (maybe he is getting a bit concerned over the impact his trade policies are having on the equity market?) and would be a big positive for the Canadian Dollar and would probably send USDCAD down toward the 50/100/200 day moving averages at 1.2718/1.2692/1.2638 - but it’s still a big if for now. For now I think you keep trading a 1.2820-1.2920 range and keep an eye out for NAFTA news and US employment this Friday.

EUR/GBP : German PMI data was a bit weaker overnight while UK PMI was slightly stronger than expected. I would say of more concern/importance to Sterling is the story circulating about the EU warning UK banks not to rely on a Brexit transition deal and to prepare contingency plans for a hard Brexit. 1.4000 should be good support (1.3995 is the 50 day MA) a break would target 1.3760. April is typically a good month for Sterling, but remember there are always exceptions to the rule.

AUD: Overnight we had the RBA who as expected, left rates unchanged and for the most part repeated their previous statement: low rates were supporting growth, growth was expected to pick up and an appreciating exchange rate would result in slower growth and inflation - nothing new here. 0.7630 remains key support with a break signaling a move to .7500