USD/CAD - Traders Respond to Inflation Figures

Canadian Consumer Price Index figures were in line with expectations. Will the current Bank of Canada rhetoric of staying ahead of prevailing headwinds of inflationary pressures move the Canadian dollar? The reaction should be: buy the loonie in anticipation of the BOC raising rates another quarter point to 1.0% in the near-term. The next BOC Interest Rate decision is set for Wednesday, September 6.

Fundamentally for the U.S. today the focus will be on the University of Michigan Consumer Sentiment at 10 am. Expectations are for a slight gain at 93.9 even in the wake of heated geopolitical tensions over the last few weeks. NAFTA talks finished their first day and it looks like NAFTA will be getting a complete overhaul and not just a tune-up. Expectations are already for the negotiation to go on through the allotted deadline of December 2017, and it is only the first day.

Experts expect a range today of $1.2500 to $1.2600

No major event risk today from Europe and only second-tier data released. This week the euro was put in the spotlight by the European Central Bank in ECB minutes where policymakers have stated their concerns of a strong euro. ECB President Mario Draghi will be speaking next week, and he is not expected to change his current tone. The Euro is currently trading at 1.4788.

Investors expect a range today of $1.4760 to $1.4867

No economic data out of the U.K. today and the calendar looks relatively quiet until next Thursday. There seems to be a slight bias towards the weakness of the sterling as the premium for downside protection and Commodity Futures Trading Commission net short positions are growing. The highlight of next week will be the release of Gross Domestic Product on Thursday. The pound is currently trading at $1.6245.

Experts expect a range today of $1.6174 to $1.6262

The Australian dollar is in recovery mode today after risk-off sentiment boosted the price of gold and helped lift the commodity currency. Gold is trading at a recent high as spot price jumps up over 0.5% this morning. Higher copper and oil prices also added further support to the Australian dollar gains today.

Oil (WTI): $47.22 U.S. per barrel

Gold: $1,298.86 U.S. per ounce

Silver: $17.12 U.S. per ounce

Copper: $2.9328 U.S. per tonne

Dollar Index: 93.44

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