Canadian Dollar Update – Canadian Dollar is looking for direction
USD/CAD Open: 1.3669, Overnight Range: 1.3665-1.3697, Previous Close: 1.3695
WTI Oil open at $78.07 and gold open at $2,364.40. US markets are lower today.
For today, USD resistance is at 1.3738. Support is at 1.3721.
- FOMC minutes were hawkish but past the “best-before” date.
- Gold tumbles sharply.
- US dollar is little changed compared to yesterday.
The Canadian dollar came under renewed pressure in the wake of hawkish FOMC minutes but support contained the losses.
The FOMC minutes from the May 1 meeting showed that officials decided that they needed to keep interest rates at existing levels for a lot longer than they previously anticipated. They didn’t think that they needed higher rates to drive inflation lower but they were very unsure of how long rates would need to be in restrictive territory before they saw a “sustainable down trend” toward the 2.0% target.
The minutes got a hawkish bite from a comment that warned some members “mentioned a willingness to tighten policy further should risks to inflation materialize in a way that such action became appropriate.”
Nevertheless, the minutes did not reveal anything that Fed Chair Jerome Powell or numerous other Fed policymakers hadn’t already disclosed in interviews and speeches subsequent to May 1.
EURUSD traded in a 1.0812 to 1.0848 range. The gains were underpinned by German PMI data and mixed Eurozone PMI reports.
GBPUSD is steady in a 1.2705-1.2745 band supported by improved UK May Manufacturing PMI to (actual 51.3 , previous 49.1). UK voters are going to the polls on July 4 and the Labour Party is leading the polls.
USDJPY is trading in a 156.53-156.91 range overnight supported by the hawkish FOMC minutes, and by the 10-year Treasury yield sitting at 4.434%. Goldman Sachs is predicting a weaker yen for longer, with the ineffective BoJ intervention being a main reason.
AUDUSD traded in a 0.6613-0.666 band. Traders ignored lower Consumer Inflation Expectations data and focused on broad US dollar demand.
Today’s US economic data includes weekly jobless claims (forecast 220,000) and new home sales while Canada releases the new housing price index report.
By KBFX | May 24, 2024 | Daily Update |
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