Canadian Dollar Update, November 10, 2021 – Canadian dollar rises ahead of US CPI
USD/CAD Open: 1.2420-24, Overnight Range: 1.2413-1.2444, Previous Close: 1.2436
WTI Oil is at $82.81 and gold is at $1,859.00. US markets are lower today.
For today, USD resistance is at 1.2513. Support is at 1.2357.
- US inflation and weekly jobless claims data ahead
- China PPI soars to 13.5% y/y in October
- US dollar opens with gains ahead of October inflation report
The Canadian dollar had a choppy overnight session. USDCAD fell from 1.2444 in Asia to 1.2413 in early NY, trading the rebounded to 1.2440 in NY.
The Canadian dollar is at the mercy of broad US dollar sentiment, and that sentiment is moderately bullish ahead of today’s inflation and jobless claims data. October CPI is expected to have risen 0.5% m/m in October, compared to the 0.4% m/m increase in September, and dip to 5.3% y/y from 5.4% y/y.
The greenback was in demand overnight in anticipation that inflation would be higher than forecast. That raises the risk of a sharp US dollar retreat on a weaker than expected report.
The US weekly jobless claims data usually released on Thursday is released today as tomorrow is Veterans Day.
The Canadian dollar is underpinned by higher oil prices. West Texas Intermediate (WTI) rallied to $84.92 overnight, then retreated to $83.73 in NY. Prices continue to be supported by predictions that demand will outstrip supply for the rest of this year and into 2022. However, the US Energy Information Administration Short-Term Energy Outlook report released yesterday suggests the supply/demand imbalance will correct itself in 2022.
Global equity indexes are steady to lower. The major Asia indexes closed with minor losses, led by a 0.61% fall in Japan’s Nikkei 225. European bourses are mixed. The UK’s FTSE 100 and Spain’s Ibex 35 index are modestly higher, the French CAC index is down, and Germany’s DAX index is unchanged. Gold and oil prices are slightly lower from where they closed, while the US 10-year yield is a tick higher. Overall, an uneventful session.
Chinese data added to today’s inflation concerns. October CPI rose 1.5% y/y vs 0.7% in September, 0.7% m/m and October PPI jumped to 13.5% y/y vs 10.7% in September. Traders hope that the proposed virtual meeting between President Xi Jinping and President Biden next week will lead to reduced tensions between the nations.
EURUSD traded in a 1.1559- 1.1547 range due to broad US dollar demand. Germany’s Council of Economic Advisors downgraded 2021 GDP growth and warned “the economy could be harmed if the ECB fails to react in a timely manner. As such, the Bank should put forward a normalisation strategy.”
GBPUSD followed EURUSD lower with renewed Brexit issues weighing on the currency pair.
USDJPY traded firmer along with the higher US 10 year Treasury yield and general US dollar strength. The antipodean currencies were rangebound.
Today’s Suggested Range USD/CAD: 1.2370 – 1.2470