USD/CAD - Oil Climbs to a 5-Mo. High

The Canadian dollar will trade on broader market sentiment today, as lack of fundamentals fail to offer direction against its trading peers. WTI Crude oil prices climbed on news of Turkey threatening to cut off oil supply coming from the Kurdistan region. With global demand predictions on the rise and a speculative supply squeeze being talked about, oil reached bull market territory trading at $52.40 U.S. per barrel overnight. Canadian month over month gross domestic product data will release on Friday morning.

With North Korean tensions mounting, the markets sold off yesterday and gold climbed along with oil. Global markets continue to be rattled by North Korea and its rhetoric that it has the right, in self-defense, to shoot down American warplanes in international airspace. The comments were made to the United Nations assembly by the North Korean foreign minister. This was in response to the speech made by U.S. President Trump to the U.N. last week. The North Korean foreign minister said it was a declaration of war while White House spokesperson Sarah Sanders confirmed yesterday that the U.S. had not declared war on North Korea.

Federal Reserve Chair Janet Yellen will speak today and may provide some clarity on the Fed's direction on normalizing rates. Mixed signals were given from William Dudley and Neel Kashkari; Dudley’s outlook remains in line for a hike in December, while Kashkari sees no reason to "tap the brakes." New Home Sales and New Home Sales Change will release at 10 a.m., which are the only fundamentals in North America.

Experts expect a range today of $1.2330 to $1.2425

No major event risk today out of Europe today, but the German Import Price Index did release, and it was in line with expectations of 0.0% m/m and 2.1% y/y. The European Central Bank’s Peter Praet will also be speaking at noon today in Frankfurt. The euro is currently trading at $1.4591.

Observers expect a range today of $1.4531 to $1.4644

U.K. British Bankers' Association Loans for House Purchase in August released better than expected at 41807 from the expectation of 41700. There doesn’t seem much effect on the downgrade of U.K.’s sovereign rating last Friday, as the market is probably more focused on Brexit and Bank of England Governor Mark Carney’s speech this Thursday. The pound is currently trading at $1.6618.
We expect a range today of $1.6574 to $1.6671

The Australian dollar is trading lower today on weaker oil and gold prices. WTI oil is down over 0.5% this morning while spot gold is down 0.7%. There was no data to report from Australia overnight, and data will continue to light this week. Investors will get the Reserve Bank of New Zealand rate statement tomorrow afternoon at 4:00 p.m. ET. The market is expecting the central bank to hold target rate unchanged at 1.75%.

Oil (WTI): $51.93 U.S. per barrel

Gold: $1,300.28 U.S. per ounce

Silver: $16.96 U.S. per ounce

Copper: $2.9312 U.S. per tonne

Dollar Index: 93.01

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