USDCAD open 1.3752, overnight range 1.3731-1.3761 close 1.3740, WTI 67.06, Gold 3324.44
The Canadian dollar is under pressure ahead of today’s US economic data. Yesterday’s EU/US trade deal, which is seen as extremely one-sided and favouring the Americans, sparked EURUSD selling which sparked broad-based demand for the US dollar.
The Canadian dollar is more vulnerable as Trump has promised to hike tariffs to 35% on August 1 and Prime Minister Carney said he won’t sign any deal that is bad for Canadians.
Traders are looking ahead to Wednesday’s Bank of Canada and Fed meetings which suggests that any reaction to this morning’s US data will be muted. The US trade gap is projected to widen to $98.4 billion from June’s $97.5 billion figure while the Case-Shiller index is expected to show a 3.0% year-over-year gain, slightly below May’s 3.4%. Meanwhile, JOLTS (job openings and labour turnover) are forecast to dip to 7.55 million from the prior 7.769 million. Consumer confidence data also due.
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Asian stock markets turned in a mixed performance, with Japan’s Topix falling 0.79%, the Hang Seng slipping 0.15%, and the ASX 200 ending unchanged.
In Europe the CAC-40 is up 1.24%, the DAX has gained 1.19% and the FTSE 100 has risen by 0.61%. S&P 500 futures edged up 0.21% while the 10-year US Treasury yield stands at 4.40% as of 7:45 am EDT.
EURUSD fell from 1.1599 to 1.1528 during the European session before recovering to 1.1580 in New York. Disappointment over the EU-US tariff agreement helped drive the move, as did the break of the uptrend that began in February. A move below the 1.1640 support level has opened the door to potential losses toward 1.1450.
GBPUSD traded in a 1.3316 to 1.3362 band. The market was largely directionless overnight, with traders awaiting fresh US data and little domestic news from the UK. One minor release showed BRC shop prices climbing 0.7% year-over-year in July, well above the forecasted 0.2%.
USDJPY drifted in a 148.-148.74 band as traders assessed the broader implications of recent trade developments and braced for upcoming Fed and Bank of Japan meetings later this week.
AUDUSD chopped about in a 0.6499-0.6531 band with directions determined by the broader US dollar moves. Caution ahead of Australia’s inflation figures also limited activity.
The Canadian economic calendar is empty.
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