USDCAD: open 1.3676, overnight range 1.3671-1.3689, close 1.3684, WTI $81.46, Gold, $2464.90
The Canadian dollar is also suffering from the prospect of Fed rate cuts.
The Canadian dollar is also under pressure because the Bank of Canada is expected to cut interest rates by 25 bps to 4.50% on July 24. Even if the Fed follows with a 25bp cut of its own on August 1, the existing CAD/US interest rate differentials will be unchanged.
EURUSD is steady in a 1.0926-1.0941 range ahead of today’s ECB monetary policy meeting. Expectations are low for this meeting, with analysts and economists nearly unanimous in their views for a benign outcome. Once again, EURUSD trading may be volatile into the 10:00 am EDT option expiry window. There are $4.5 billion of EURUSD strikes between 1.0880-1.0905 expiring, with another $2.0 billion of 1.0930-50 strikes.
GBPUSD is at its session low after trading in a 1.2977-1.3014 range overnight. The ONR UK employment report showed that “Annual growth in employees’ average regular earnings (excluding bonuses) was 5.7%. The growth was last lower than this in June to August 2022, when it was 5.4%.”
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USDJPY traded erratically in a 155.38-156.59 range, and it is at the top of that band in NY trading. BoJ intervention combined with Donald Trump’s comments about the undervalued yen are limiting gains.
AUDUSD traded defensively in a 0.6715-0.6744 range after the unemployment report reinforced calls for the RBA to cut interest rates this year. Australian Employment rose by 50,200 in June (forecast 20,000, previous 39,500). The unemployment rate ticked up to 4.1% from 4.0%, which is why RBA rate cut calls became louder.
Today’s U.S. data includes weekly jobless claims and the Philadelphia Fed Manufacturing Survey. The Canadian calendar is empty.
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