Canadian Dollar Update, July 12, 2021 – Canadian Dollar Bounces Off Resistance
USD/CAD Open: 1.2491-95, Overnight Range: 1.2449-1.2513, Previous Close: 1.2445
WTI Oil is at $73.69 and gold is at $1,805.40. US markets are mixed today.
For today, USD resistance is at 1.2489. Support is at 1.2441.
• Canadian dollar gives back post-employment report gains
• Traders cautious ahead of BoC meeting and Fed Chair Powell testimony Wednesday
• US dollar opens modestly higher vs G-10 majors, compared to Friday’s close
The Canadian dollar did not receive any lasting benefit from Friday’s forecast-beating employment report.
The June Labour Force Survey (LFS) showed Canada gained 230,700 jobs while the unemployment rate dropped to 7.8% from 8.2%. USDCAD fell from 1.2495 before the release to and finished the day at 1.2445.
The LFS details were rather weak. All the employment gains were in part-time jobs, while full-time jobs declined. The focus quickly shifted to US developments.
Wall Street indexes climbed steadily and closed at record highs. The positive sentiment from Friday carried forward into Asia. Japan’s Nikkei 225 index climbed 2.25%, leading the major Asian equity indexes higher. European equity traders were cautious, and the major bourses are trading in negative territory as Q2 earnings season begins.
Fed Chair Jerome Powell’s quarterly testimony to Congress starts Wednesday. He is expected to defend the Fed’s dovish policy stance in the face of strong economic growth and questions about the timing for tapering quantitative easing purchases.
The US dollar started the NY session with a bit of a safe-haven bid, due to US/China tensions and fourth-wave coronavirus fears.
EURUSD traded in a 1.1843-1.1879 range and opened in NY at session lows. ECB President Christine Lagarde warned of a policy change announcement at next week’s ECB meeting. She hinted that there may be new measures to help shore up the Eurozone economy.
GBPUSD is trading at the bottom of its 1.3843-1.3909 range, on broad US dollar strength, due to souring risk sentiment. Traders are awaiting inflation data on Wednesday and the UK employment report on Thursday.
USDJPY traded in a 109.99-110.27 range overnight. The modest recovery in US 10-year Treasury yields to 1.35% today gave the currency a bit of support. However, bearish technicals continue to limit gains.
AUDUSD and NZDUSD are tracking broad US dollar sentiment, and both currency pairs are trading defensively. Tuesday, the Reserve Bank of New Zealand monetary policy meeting statement is released. The market expects a somewhat hawkish outlook supporting forecasts for a November rate hike.
The Canadian dollar is tracking commodity currency price action, along with S&P 500 moves. Traders are awaiting the BoC policy meeting statement and the quarterly Monetary Policy Report., on Wednesday.
There are not any top-tier Canadian or US economic reports available today.
Today’s Suggested Range USD/CAD: 1.2440 – 1.2540