Loonie Trades on Consolidated Range

The Canadian dollar continues to trade in its consolidated range of $1.2084 ($0.8275) and $1.2232 ($0.8175). A breakout of this range is imminent with Consumer Price Index data due to be released Friday morning. The Bank of Canada has been clear with the market that it is economic-data-dependent when it comes to future interest rate decisions.

The biggest event risk this week will be the U.S. Federal Reserve's interest rate decision on Wednesday at 2 p.m. ET. Last week's U.S. CPI the key inflation gauge, pushed to 1.9% in August from 1.7%. With five consecutive months of disappointing inflation readings, most investors are not pricing a rate hike this week. December's decision is gaining momentum for a probable hike. Tomorrow's Building Permits and Housing Starts along with Wednesday's Retail Sales are the main event risks before the Federal Open Market Committee Wednesday afternoon rate decision.

Experts expect a range today of $1.2084 to $1.2232

The euro is continuing its upward momentum from late last week after it was trading near area of support. Inflation in Europe printed in line with expectations and released at 1.5% y/y on headline and 1.2% y/y on core. European Central Bank President Mario Draghi is still expected to reduce Quantitative Easing at the October policy meeting and completely finish at the end of December. The Euro is currently trading at $1.4585.

Commentators expect a range today of $1.4550 to $1.4635

The Great British Pound seems to be settling this morning after last week’s jump from a hawkish Bank of England. No event risk came out of the U.K. this morning, but BoE Governor Mark Carney will speak later this afternoon at the International Monetary Ffund in Washington. He will also be speaking in Florence on Friday on Brexit. The pound is currently trading at 1.6546.

Investors expect a range today of $1.6497 to $1.6609

The Australian dollar is relatively flat this morning as falling iron ore futures weigh on the commodity currency. There was no major domestic data released today, so the focus will be on the Reserve Bank of Australia’s Monetary Policy Meeting Minutes tonight at 9:30 pm ET. The RBA has given no indication recently that it plans to move interest rates until late 2018 and investors will likely see this being reaffirmed here. Any alteration to this stance could motivate markets.

Oil (WTI): $49.83 U.S.

Gold: $1,311.79 U.S. per ounce

Silver: $17.35 U.S. per ounce

Copper: $2.9587 U.S. per tonne

Dollar Index: 91.83


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