USD/CAD - Geopolitical Risk Drives Markets

The Canadian dollar is trading higher this morning after the release of soft U.S. inflation numbers. Geopolitical risk remains the main driver of the markets today. In this environment, commodities are mixed, oil is lower while metals are mostly firmer. There are no major domestic data releases today so the loonie will continue to trade along with broader market sentiment.

Risk aversion continues to dominate the markets today, following U.S. President Trump's comments concerning North Korea yesterday. U.S. inflation numbers released this morning missed the target and is dragging the U.S. dollar down. Headline Consumer Price Index and Core CPI both came in at 0.1%, missing the target of 0.2%. Focus now swifts to Federal Open Market Committee members Robert Kaplan and Neel Kashkari’s speeches at 9:40 a.m. and 11:30 a.m. EDT.

Experts expect a range today of $1.2628 to $1.2745

No U.K. fundamentals are expected today, leaving the sterling to trade on broader sentiments. Main event next week with be the release of CPI and employment data on Tuesday and Wednesday respectively. The sterling has soften today and currently trading near weekly lows at $1.6440.

Observers expect a range today of $1.4942 to $1.5010

German Inflation in July printed in line with expectations of 1.7% y/y. The euro has managed to climb back up and retrace early week losses. European fundamentals will be off to a slow start next week no major event risks until Tuesday when German Gross Domestic Product release. The euro is currently trading at $1.4985.

Market watchers expect a range today of $1.6405 to $1.6474

The Australian dollar is stabilizing this morning as it trades off its low. Reserve Bank of Australia Governor Philip Lowe’s comments which showed the central bank’s willingness to intervene in the FX market is keeping the Aussie on a softer tone. Lowe also pointed out low wage growth as one of the key risk to the Australian economy, which is further denting sentiment around the Aussie.

Oil (WTI): $48.46 U.S. per barrel

Gold: $1,284.05 U.S. per ounce

Silver: $16.96 U.S. per ounce

Copper: $2.9022 U.S. per tonne

Dollar Index: 93.20

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