FX Flows

From the FXWW Chatroom: In a taped CNBC interview, Bank of Canada Governor Stephen Poloz reiterated that rate cuts have done their job and he sees Canadian growth above potential. Those words moved UsdCad lower. It was near 1.3200 and slipped to 1.3174. On the bounce, real money accounts sold UsdCad near 1.3180 at the Asia open. US names were selling the pair under 1.3160 and again through 1.3150.

UsdJpy drifted lower from 112.30. Japanese names were seen selling Usd, not surprising given the move overnight. Yields of UST were also weaker after Tokyo opened. Downside support is now 111.80 (100-Day SMA) also the Ichimoku Cloud is at 111.74; then 111.60 option expiry for $2bn. Offers are mentioned at 112.50, they have been there last 24 hours.

AudUsd is firm this morning. I was told that those who sold Aussie to the way to 0.7620 have replenished their sell orders again. Same as yesterday, big level remains at 0.7645. Positive price action in iron ore futures, up more than 3% did help the AudUsd little. There is a 0.7635 option strike maturing tomorrow for Aud700mio. Bids reported 0.7560-70.

EurUsd continued to climb on ECB Draghi’s hawkish stance. Topside resistance is seen at 1.1366, Aug 2016 high, then 1.1428 from a year ago. Nothing interesting in the orderboard, option expiries today 1.1300 and 1.1350 but not large.

Cable struggled to advance as market ploughed into long EurGbp. Media turning up the heat on Theresa May after top government officials appeared to be split over the Brexit negotiations. (CIBC)

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