News & Analysis
News & Analysis

FX analysis – USD drops ahead of FOMC minutes, CAD falls on cool CPI, AUD and NZD supported by PBoC decision

21 February 2024 By Lachlan Meakin


USD sold off in Tuesdays session after US traders returned from holiday. DXY falling for a 5th straight session after finding stiff resistance at the psychological 105 level and breaking below its 100 DMA before finding some support at the 200 DMA before retracing somewhat as market risk sentiment soured during the US equity session. Lower yields as bonds were bid ahead of FOMC minutes later today also weighing on the USD.

CAD was the G10 underperformer after Canadian CPI came in much softer than expected. USDCAD breaking above 1.3500 and looking to test the 50% Fib level at 1.3541. Futures pricing of BoC rate moves repricing dovishly on the back of the CPI reading, along with a drop in oil prices hitting the CAD.

AUD and NZD saw gains against the USD mostly in the APAC session after the larger than expected cut to the 5yr LPR by the PBoC. A stock sell off in the US session saw some of those gains retrace with AUDUSD hitting resistance at the 50% fib level and unable to hold above the 200 DMA. NZD outperforming AUD in the end, seeing the AUDNZD cross rate drop for a 3rd straight session to hit a 1 week low at 1.0613. Today ahead for Aussie watchers will be key wage data released at 12:30 AEDT.

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