USD/CAD - Loonie is Range Bound

US Dollar vs Canadian Dollar

The Loonie is relatively flat this morning having recovered from the losses driven by comments from the President over the termination of NAFTA. Yesterday’s supportive retail sales report has helped to firm up expectations for an October rate hike. Domestic risk is limited today as there are no major releases until next week’s current account and GDP report. Oil prices are holding steady as we go into oil inventory data at 10:30 am EST.

The USD is trading mixed against its G10 counterparts this morning. In a rally yesterday, President Trump made comments of terminating the NAFTA agreement. The impact on the CAD was limited while the MXN fell nearly 0.8%. Data release today are mostly second tier with Flash Manufacturing PMI at 9:45 am EST and New Home Sales at 10:00 am. Voting FED member Kaplan will also speak this morning.

The expect a range today of 1.2519 to 1.2641

Canadian Dollar vs Euro and Great British Pound

August PMI data and Draghi are the focus of the day in Europe. For the most part, Manufacturing, Services and Composite PMI in France, Germany and the Eurozone exceeded expectations. The exceptions were France and Eurozone’s Services PMI which came in below forecasts. The Euro has generally reacted positively to this data. President Draghi appeared in Germany today and market participants were looking for some indication of the end of monetary stimulus, but to no avail. Draghi redirected his focus towards their dilemma of robust growth and low inflation and kept his comments about monetary policy at bay. Jackson Hole on Friday will be his next appearance. The Euro is currently trading at 1.4845.

We expect a range today of 1.4790 to 1.4892

No major event risk out of the UK today leaving the Sterling to trade on broader sentiments. Next major data release will occur on tomorrow when GDP will release along with other second tier data. The GBP is currently trading at 1.6111.

We expect a range today of 1.6051 to 1.6157

Canadian Dollar vs Australian Dollar and New Zealand Dollar

The Aussie is trading slightly lower today failing to build on the bullish momentum at the start of the week. Softer risk sentiment in the market and a forecast downgrade from the New Zealand Treasury is putting pressure on the AUD today. Copper prices are also flat as it consolidates its recent gains, which does little to help the commodity currency today.

Oil (WTI): 47.76
Gold: 1287.72
Silver: 16.99
Copper: 2.9792
Dollar Index: 93.31

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