Investors’ Appetite Improves, CAD Traders Await Key Data

Equities Rebound on Stimulus Optimism

The US dollar traded lower against all the other G10 currencies on Tuesday and during the Asian morning Wednesday. It underperformed the most versus SEK, NOK, CAD, and EUR in that order, while it lost the least ground versus JPY and GBP.

FTSE 100 — Technical Outlook

The FSTE 100 index is still trading below a medium-term downside resistance line taken from the high of June 9 th. However, from around the beginning of September, the price is struggling to move below one of its key support areas, at 5766, which marks the lows of September 4 thand 25 th. For now, we will take a neutral stance, as we believe the price may continue moving between that downside line and that support area.

Canada CPIs and Retails Sales on Today’s Agenda

Back to the currencies, the Canadian dollar was among the main G10 winners, with its traders awaiting the nation’s CPIs for September and retail sales for August, both due out later today. With regards to the CPIs, the headline rate is expected to have risen to +0.4% yoy from +0.1%, but no forecast is available for the core one, which stood at +0.8% yoy in August. Retail sales are also expected to have accelerated, in both headline and core terms.

USD/CAD — Technical Outlook

USD/CAD continues to trade below a short-term tentative downside resistance line taken from the high of September 30 th. This morning, the pair had already broken its key support area, at 1.3100, which was previously the lowest point of October. With this move, the rate has confirmed a lower low, which may attract a few more sellers into the game. For now, we will take a bearish approach.

As for the Rest of Today’s Events

During the early European morning, we already got the UK CPIs for September. Both the headline and core rates rose to +0.5% yoy and +1.3% yoy from +0.2% and +0.9%, in line with market’s forecasts. In our view, combined with Deputy Governor Dave Ramsden’s recent remarks that he and his colleagues are not about to use negative interest rates immediately, accelerating inflation may allow BoE officials to stay sidelined at their next gathering.

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