USD/CAD - Jobs Data Looming on Both Sides of Border

With the lack of Canadian fundamentals, the loonie will trade on the broader market sentiment. The Canadian dollar has fallen against the greenback over the last 48 hrs as the market prepares for the North American job numbers tomorrow. The market would rather hold USD long positions heading into the 8:30 am announcements. Employment Change for Canada is anticipated for +10K, and the Unemployment Rate is to remain at 6.5%.

The U.S. dollar has upward momentum against its G7 counterparts. The greenback is up against the pound as the Bank of England left rates unchanged and cited weaker growth expectations into 2018. The dollar is flat in comparison to yesterday's close against a firm euro and moving higher against commodity based currencies. This morning, investors had weekly Initial Jobless Claims, and Continuing Jobless Claims reported at 240,000 and 1.968 million, respectively. Economic data continues with Markit Service Purchasing Managers Index and Markit Composite PMI at 9:45 a.m. To complete a busy morning of global and domestic fundamentals at 10 a.m., investors have Factory Orders, as well as Institute for Supply Management Non-Manufacturing PMI, which are both expected for supportive readings.

Experts expect a range today of $1.2533 to $1.2639

PMI Services and Composite data are the themes of the day and they were mainly mixed. Italy’s PMI exceeded expectations, but Germany’s PMI fell below forecasts. France’s Services PMI beat forecasts, but its Composite PMI dropped below expectations. Euro-zone Services PMI hit the mark, but Composite PMI missed. Euro-zone Retail Sales grew from the previous month and exceeded forecasts printing at 0.5% m/m and 3.1% y/y. The euro is currently trading at $1.4926.

Observers expect a range today of $1.4888 to $1.4959

As expected, Bank of England left rates on hold and Asset Purchase Target at 0.25% and 435 billion respectively. The more interesting facts are that the vote took a step back with a 6-2 shift favouring to leave rates unchanged from the previous month of 5-3 and that BoE Governor Mark Carney has cut 2017 growth forecasts to 1.7% instead of 1.9%. The dilemma BoE is currently facing is surging inflation from a weak pound, a slowdown in the economy, drop in consumer spending and declining inward investment. The pound took a major dump dropping over a cent on this news and is currently trading at $1.6516.

Investors expect a range today of $1.6492 to $1.6583

The Australian dollar traded further lower today after the release of weak domestic and Chinese data overnight. Australian June trade balance came in at 856 million dollars, missing the forecast of 1.8 billion, which also fell from the previous month’s figure of 2.02B. Adding to the downside pressure is poor Chinese Caixin Service PMI which came in at 51.5, missing the target of 51.9. The double whammy will keep the Aussie under pressure today. Event risk now turns to tonight’s Reserve Bank of Australia Monetary Policy Statement and Retail Sales report at 9:30 p.m. EDT

Oil (WTI): $49.87 U.S. per barrel

Gold: $1,265.84 U.S. per ounce

Silver: $16.63 U.S. per ounce

Copper: $2.8731 U.S. per tonne

Dollar Index: 92.97

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