USD/CAD - Loonie Trading Flat Today

The Canadian dollar is trading flat today as it consolidates near its recent high. Expectations for another Bank of Canada rate hike remains firm to keep the supportive tone for the loonie. Oil is also testing $ 50/bbl to add further support. There are no major data releases until Friday’s employment and trade data. The loonie will likely trade within broader market sentiment and U.S. data until the major domestic data releases on Friday.

The U.S. dollar is steadying today after yesterday’s drop; however, the overall tone continues to be soft. Political risks and higher European yields are pulling investors away from the greenback and into the euro where it offers a better risk/reward profile. Traders will have plenty of data to work off this week. Today, they will ponder the Institute for Supply Management Manufacturing Purchasing Managers' Index data, ADP Non-farm Employment Change and Crude Oil Inventories on Wednesday, Unemployment Claims and ISM Non Manufacturing PMI on Thursday and then Unemployment rate and Non-Farm Employment on Friday. Positive domestic data will help give the USD a boost, but it may not change the overall softer trend in the U.S. dollar.

Experts expect a range today of $1.2441 to $1.2534

It promised to be a busy day on the fundamental side in Europe as they were mainly mixed. The euro-zone, Germany and France recorded a lower-than-expected Manufacturing PMI reading of 56.6, 58.1 and 54.9 respectively, while Italy surprised to the upside with a reading of 55.1. Unemployment rate in July for Germany held steady at 5.7%, while Unemployment Change came in short of expectations and dropped to -9K. Euro-zone Gross Domestic Product for Q2 slightly grew from previous month and hit the mark at 2.1% y/y and 0.6% q/q. The euro has dropped from recent highs and is currently trading at $1.4750.

Observers expect a range today of $1.4706 to $1.4791

U.K. House Prices in July have dropped from previous month, but exceeded expectations of 2.7% y/y and -0.1% m/m as Nationwide reported readings of 2.9% y/y and 0.3% m/m. Manufacturing PMI in July also surprised to the upside at printed at 55.1 from the expected 54.5. These positive data resulted in the sterling to make a fresh high heading into the North American open. The pound is currently trading at $1.6478.

Traders expect a range today of $1.6447 to $1.6567

The Aussie is retracing some of its gains following last night’s Reserve Bank of Australia Rate Statement. The central bank stated that the current economic outlook is positive, but reiterated concerns of a high Aussie which would create headwinds for growth and extend the time to reach the central bank’s inflation target. There also seems to be some profit taking by traders as they lighten their positions.

Oil (WTI): $49.92 U.S. per barrel

Gold: $1,266.37 U.S. per ounce

Silver: $16.68 U.S. per ounce

Copper: $2.8791 U.S. per tonne

Dollar Index: 92.94

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