Canadian Dollar Update, October 22, 2021 – Canadian dollar awaiting Retail Sales data
USD/CAD Open: 1.2331-35, Overnight Range: 1.2325-1.2373, Previous Close: 1.2370
WTI Oil is at $82.96 and gold is at $1,802.60. US markets are mixed today.
For today, USD resistance is at 1.2395. Support is at 1.2303.
- Rising global equities keep global risk sentiment positive
- Fed Chair Powell speech at 11:00 am ET
- US dollar ending the week with losses against G-10 major currencies
The Canadian dollar has risen 0.48% since Monday’s NY open and today. Prices climbed steadily in Asia and continued to do so during the European session and in early NY trading. Traders are in a positive risk mood, powered by relentless gains on Wall Street.
The S&P 500 has risen for seven consecutive days and even the jump in US 10-year Treasury yields from 1.575% on Tuesday to 1.70% overnight failed to dampen enthusiasm. That enthusiasm has knocked the US dollar for a loop this week, and it is poised to close with losses against the major G-10 currencies. The antipodean currencies are the biggest gainers with the New Zealand dollar rising 1.74% and the Australian dollar gaining 1.62%. The Canadian dollar managed to eke out a 0.48% gain.
The Canadian dollar is benefitting from West Texas Intermediate oil prices trading above $80.00/barrel. Those prices have additional upside due to post-pandemic demand, supply issues, and expectations for an early, cold start to winter.
Statistics Canada releases August Retail Sales data today. Retail Sales are expected to have risen 2.0% m/m and ex auto’s by 2.8%. The results are unlikely to have a lasting impact on the Canadian dollar as price action is being dictated by external forces.
EURUSD spent the week in a 1.1620-1.1670 range, and it is sitting around the middle of that band in early NY trading. Gains were capped by disappointing PMI data. Composite and Services PMI were weaker than expected, while Manufacturing PMI was close to unchanged. Analysts continue to suggest the weakness is due to supply chain disruptions.
GBPUSD was unable to hang on to yesterday’s gains and prices dropped from 1.3814 to 1.3773. Weaker than expected Gfk consumer Confidence (actual -17, previous -13) and September Retail Sales (actual -0.2% m/m vs forecast 0.5%) reflect the impact of supply issues on the economy.
USDJPY traded defensively despite the surge in US 10-year Treasury yields. Japanese CPI was as expected. The Bank of Japan monetary policy meeting is next week.
AUDUSD climbed steadily, rising from 0.7153 to 0.7187, benefitting from broad US dollar weakness, high commodity prices and speculation that the RBA will need to raise interest rates sooner than expected.
Fed Chair Powell speaks at 11:00 am today.
Today’s Suggested Range USD/CAD: 1.2300 – 1.2400