USD/CAD - Focus Remains on North Korea

The Canadian dollar regained strength after weekly losses against its U.S. counterpart as oil moved over $50.00 per barrel. The loonie has been consolidating between $1.2084 and $1.2194 against the big dollar for the past two weeks. Anticipation is for much of the same focus moving into the middle of next week. As the Federal Reserve's interest rate announcement looms, a breakout of the channel is possible. Retail sales this morning for the U.S. missed expectations solidifying a hold on interest rates from the Federal Open Market Committee.

Later this morning, investors will consider the University of Michigan Consumer Confidence, and the consensus is for 95.0. Headline focus is on North Korea today as Pyongyang denounced the latest United Nations sanctions and fired another missile over the bow at Japan and putting Guam in range. World statesman called on Russia and China to take action against North Korea and force their hands to talk. U.S. equity markets were mixed heading into the open.

The euro-zone trade surplus came in slightly smaller than forecast at 18.6 billion euros. However, the focus was on comments by the European Central Bank’s Sabine Lautenschalaeger where she said it is time to scale back on the asset purchasing program. The comments gave the euro a boost and are keeping the currency well supported today against its U.S. counterpart.

The pound sterling spiked today after the Bank of England’s Gert Jan Vlieghe said he would support a rate increase and said the market might be under-pricing a BoE rate hike. Vlieghe is traditionally more dovish, so his hawkish comments are resonating with the market. Markets are now looking for a rate hike in November.

The Australian dollar is relatively flat this morning as it holds onto yesterday’s gains. The softer metal process will likely cap further upside for the commodity currency today. Copper is down 0.15% while gold is also down 0.28% this morning.

Oil (WTI): $49.86 U.S. per barrel

Gold: $1,325.99 U.S. per ounce

Silver: $17.70 U.S. per ounce

Copper: $295.25 U.S. per ounce

Dollar Index: 91.62

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