- Canada Retail Sales expected to rebound.
- US 10-year Treasury yield flirting with 4.50%
- US gives back some gains but remains bid.
USDCAD open: 1.3460-64, overnight range: 1.3454-1.3486, close 1.3484, WTI $90.58, Gold, $1925.37
The Canadian dollar is recouping recent losses, boosted by higher commodity prices and pre-weekend profit-taking.
West Texas Intermediate (WTI) oil is rebounding after a dip following Wednesday's FOMC meeting. News of Russia halting diesel and gasoline exports, combined with a 2.114 million barrel drop in US crude inventories, has supported oil prices. Additionally, previously announced production cuts by Saudi Arabia and Russia, along with OPEC's optimistic outlook for demand exceeding supply, have pushed year-end price estimates up to $100.00 per barrel.
Canadian Retail Sales for July are expected to show a 0.4% month-on-month increase, compared to June's 0.1%. The Canadian dollar's reaction will depend on whether the results significantly exceed this estimate.
Concerns about a US recession are resurfacing as analysts predict that the Fed will maintain elevated interest rates for an extended period. This sentiment has pushed the US 10-year Treasury yield to just over 4.50%, marking a 40 basis point jump since the beginning of the month.
EURUSD is trading within a narrow range of 1.0615 to 1.0668. While German and Eurozone PMI data provided some support, negative technicals are limiting gains.
GBPUSD traded negatively within a range of 1.2233 to 1.2307, as widening UK and US interest rate differentials weighed on the currency.
UK economic data presented a mixed picture, with Retail Sales rising by 0.4% month-on-month in August, while September's Services PMI slipped to 47.2 from the previous 49.5.
USDJPY advanced following another dovish decision by the Bank of Japan, leaving interest rates unchanged as expected. Attention quickly turned to the rise in the US 10-year Treasury yield. Japanese Core-CPI remained steady at 4.3%, while Services PMI dipped slightly from 54.3 to 53.3.
AUDUSD gained ground towards the end of the week, driven by profit-taking. The Australian government's announcement of its first budget surplus since 2008, totaling AUD 22 billion, provided additional support. Australian PMI data showed signs of expansion, with Composite and Services PMI entering positive territory, though Manufacturing PMI softened slightly to 48.2 from the previous 49.6.
Today's US data includes the second-tier S&P Global PMI report.
