Canadian Dollar Update – Canadian dollar shrugs off weak employment report
USD/CAD Open: 1.3327-31, Overnight Range: 1.3317-1.3357, Previous Close: 1.3341
WTI Oil open at $68.22 and gold open at $1,965.27. US markets are higher today.
For today, USD resistance is at 1.3383. Support is at 1.3361.
- Focus on FOMC and ECB meetings this week.
- WTI oil slumps despite Saudi production cut.
- US dollar opens lower as risk sentiment improves.’
The Canadian dollar continues to consolidate recent gains although further upside is facing some high hurdles.
Canada’s employment situation turned ugly in May as employment fell 17,000 rather than rise 23,200 as expected. However, the details were not bad but it is an indication that the tight labour market is loosening. Canadian dollar weakness following the report was short-lived.
Canadian dollar traders are also ignoring slumping West Texas Intermediate (WTI) oil prices which have plunged nearly 9.0% (peak to trough) since the Saudi Oil Minister announced a unilateral 1 million barrel/day production cut at the beginning of the month. WTI touched $67.70 just before NY opened today with the downside slide exacerbated by news that Goldman Sachs cut its Brent oil price forecast for the third time this year. They now expect the year end price at $86.00/b.
Traders are biding their time until Tuesday’s US inflation report and Wednesday’s FOMC meeting statement and press conference.
The consensus is that the Fed just has one more hike left with the only debate as to whether its this week or next month. Most forecasters expect them to leave rates unchanged on Wednesday.
EURUSD remains near the upper boundary of its 1.0737-89 range, buoyed by optimism that the Federal Reserve will abstain from implementing a rate hike this month, while the European Central Bank (ECB) plans to raise rates by 25 basis points (bps). Traders dealing with EURUSD appear unconcerned about the commencement of the Ukraine offensive or Vladimir Putin’s intentions to deploy nuclear weapons in Belarus.
GBPUSD fluctuated within a range of 1.2567-1.2598. Prices received a slight boost following remarks from Bank of England (BoE) official Jonathan Haskel, who indicated that future rate hikes should not be ruled out. However, these gains could be reversed tomorrow if the UK employment report falls short of expectations.
USDJPY currently lingers near the lower limit of its 139.08-139.64 range. BoJ Deputy Governor Masazumi Wakatabe suggested that the Bank of Japan (BoJ) intends to maintain its present policy at the meeting scheduled for Friday.
AUDUSD traded within a range of 0.65733-0.6774, coinciding with Australia’s closure due to a holiday.
The US and Canadian data calendars are empty.