USD/CAD - Central Bank Outlook in Focus

The Canadian dollar has softened from Friday's gains and remains in oversold territory. The outlook for the Bank of Canada to raise interest rates this fall continues to add value to the loonie. This morning, the Raw Material Price Index showed declines of -3.7% compared to previous of -1.7. This Friday, Employment and Unemployment rate are the biggest event risks of the week for the loonie.

As equities sit at all-time highs in the U.S., hints of risk-off sentiments are giving the U.S. dollar momentum against its currency counterparts. The market will closely monitor this Friday's job numbers, as expectations are for 180,000 jobs gained and the unemployment rate is expected to drop to 4.3% from 4.4%. Today’s economic data is limited to Chicago Purchasing Managers' Index, Pending Home Sales, followed by the Dallas Fed Manufacturing Activity Index.

Market observers expect a range today of $1.2414 to $1.2547

Euro-zone Consumer Price Index in July released this morning, and core inflation made a slight jump from the expectation of 1.1% and printed at 1.2%. Headline inflation printed as expected at 1.3%. The unemployment rate did drop to 9.1% from the expected 9.2%, which is the lowest since February 2009. Analysts are expecting a tapering of Quantitative Easing later this fall. The euro is currently trading at $1.4645.

Experts expect a range today of $1.4684 to $1.4600

U.K. mortgage approvals in June printed just shy of expectations of 65.0K and released at 64.7K. Net Consumer Credit in June hit the mark at 1.5B. The main event of the month will be this week's Super Thursday when Bank of England's policy decision and Quarterly Inflation Report will release. The pound is currently trading at $1.6316.

Traders expect a range today of $1.6325 to $1.6441

The Australian dollar is under pressure to start the week following the reports of weak Chinese data released overnight. Official manufacturing Purchasing Managers’ Index for July dropped to 51.4 from the previous month’s reading of 51.7, which missed the forecast of 51.6. The focus will be on the Reserve Bank of Australia’s Rate Statement tomorrow at 12:30 a.m. EDT. Expectations are for the central bank to keep policies on hold.

Oil (WTI): $49.42 U.S. per barrel

Gold: $1,266.74 U.S. per ounce

Silver: $16.79 U.S. per ounce

Copper: $2.8881 U.S. per tonne

Dollar Index: 93.46

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