USD/CAD - Dollar Consolidates But Still Supportive

The Canadian dollar tested resistance at $1.2158 yesterday against its U.S. counterpart. Economic fundamentals are light this week, and the loonie finds itself trading on market sentiment and technical analysis. Crude Oil Inventories will be released at 10:30 a.m. EDT and may provide a backdrop for the petrol currency to trade off after hurricanes Harvey and Irma battered the Gulf States.

U.S. Producer Price Index figures were released this morning, and the data showed that the average price change month over month was in line with consensus. PPI did rise YoY to 2.4% and less food and energy to 2.0% from 1.9% and 1.8%, respectively. The biggest fundamentals ahead of next week’s Federal Open Market Committee meeting and interest rate announcement is tomorrow's Consumer Price Index figures. Inflation is expected at 1.9% YoY from the prior of 1.7%. The U.S. dollar index closed at 91.88 yesterday after reaching a high of 92.04 as investors and traders are remaining nimble ahead of the Fed next week. The market is positioning to hold greenbacks going into next week’s announcement.

The euro is trading flat today. Employment in the euro-zone rose 0.4% in Q2 while industrial production and German inflation both came in as expected at 0.1% and 1.8%, respectively. European Central Bank economist Peter Praet will speak today and may provide more insights into the ECB’s thinking.

The pound sterling is trading softer this morning after domestic wage data came in weaker than expected. The Average Earning Index in the U.K. came in flat at 2.1%, missing the forecast of 2.3%. On the other hand, employment data was strong with the unemployment rate down from 4.4% to 4.3%. Based on the mixed data today, policymakers may be less encouraged to hike rates given the widening gap between wage growth and inflation.

The Australian dollar is holding steady has to go into domestic employment data and Chinese industrial production numbers this evening at 9:30 p.m. and 10:00 pm EDT. The market is looking for an increase of 17,500 jobs and is expecting no change for the unemployment rate. Chinese Industrial Production is expected to increase to 6.6% from 6.4%.

Oil (WTI): $48.64 U.S. per barrel

Gold: $1,330.81 U.S. per ounce

Silver: $17.81 U.S. per ounce

Copper: $299.10 U.S. per tonne

Dollar Index: 91.95

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