Canadian Dollar Update, September 24, 2021 – Canadian Dollar Looking for Direction
USD/CAD Open: 1.2684-88, Overnight Range: 1.2643-1.2697, Previous Close: 1.2643
WTI Oil is at USD$73.72 and gold is at USD$1,753.10. US markets are lower today.
For today, USD resistance is at 1.2740. Support is at 1.2647.
• Canadian dollar ignores oil price increase
• Soft German IFO data ignored
• US dollar grinding out gains in early NY trading
The Canadian dollar is rangebound and trading with a negative bias. USDCAD is bouncing between its September 15 low of 1.2620 and its September 20 peak of 1.2895 as prices rise and fall at the whim of global risk sentiment.
Canadian economic data is not a factor.
Canadian Retail Sales posted a modestly better than expected result yesterday. July Retail Sales fell 0.6% m/m compared to the forecast for a decline of 1.2%, but the news did not impact the currency.
The Canadian dollar drifted lower alongside falling AUDUSD and NZDUSD prices due to lingering concerns about rising US interest rates sooner than expected.
Prices are also under pressure to ongoing concerns about China’s Evergrande Group.
Fed Chair Jerome Powell and ECB President Christine Lagarde said the risks to their respective economies if Evergrande went bankrupt were minimal, saying it was mostly a domestic Chinese issue. Nevertheless, traders were a tad concerned after Evergrande failed to make a US dollar coupon payment yesterday, even though it negotiated a 30-day grace period.
Asia markets closed mixed despite Wall Street’s positive close. Japan’s Nikkei 225 index gained 2.06%, but Hong Kong’s Hang Seng Index fell 1.30%. European bourses are trading flat to lower, with the Garman Dax losing 0.69% at 8:00 am ET. Wall Street is poised to open in negative territory as S&P and DJIA futures are down.
US Treasury yields are getting a lot of attention after rising from 1.334% yesterday to 1.446 in Asia overnight. The rally is due to the prospect for higher US interest rates and the unwind of some safe-haven trades.
USDJPY traders took note of the Treasury yield rally, and prices climbed to 110.56 from 109.73 on Thursday.
EURUSD remains under pressure and is trading at the bottom of its overnight 1.1714-1.1747 range. Dovish comments from ECB President Lagarde reiterated that inflation gains were temporary is weighing on prices.
GBPUSD is tracking EURUSD lower, falling from 1.3735 to 1.3674 due to fears rising UK gas prices will trigger an economic slowdown and delay a possible Bank of England rate hike.
The US and Canadian economic calendars are empty. Fed Chair Powell and Vice Chair Clarida will be speaking at the “Fed Listens” virtual event at 10:00 am today.
Today’s Suggested Range USD/CAD: 1.2640 – 1.2740
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