USD/CAD - Greenback Stronger as Markets Focus on Fed

U.S. Federal Reserve Chair Janet Yellen spoke of the unconventional tools used by the Fed to overcome the Great Recession; she also signaled that the Fed would potentially return to these type of measures if an economic downturn is warranted. The most significant risk events for the U.S. are durable goods orders on Wednesday and gross domestic product on Friday.

Investors will mull over the Bank of Canada's Monetary Policy Report and rate announcement this Wednesday. With interest rates at pre-crisis levels, Governor Stephen Poloz did state in his last speech on October 14 that the central bank will have a more data-dependent response to rate hikes. Last Friday’s Retail Sales and consumer price index figures would indicate no rate hike is coming from the BOC this Wednesday.

The euro remains soft today as the struggle between Madrid and Catalonia continues in Spain. The government in Madrid ad announced that it would remove the Catalan leadership if the latter declared its independence while threatening jail terms. The Catalan representatives are expected to respond this week. Main event risk will be the European Central Bank policy decision on Thursday.

The pound is trader softer today after U.K. manufacturing orders for Oct reported weaker than expected. Export orders and output are both weaker over the past three months, suggesting weaker output but tightening capacity constraints. Prime Minister Theresa May is going to update U.K. lawmakers on Brexit today.

The Australian dollar is trading flat today as it fails to recover from last week’s drop. Disappointing data from China is also weighing on the currency. House price data for September came in at 6.3%, down from the previous month’s reading of 8.3%. Event risk turns to Australian inflation data out at 8:30 p.m. EDT.

Oil (WTI): $52.14 U.S. per barrel

Gold: $1,274.84 U.S. per ounce

Silver: $16.93 U.S. per ounce

Copper: $317.45 U.S. per tonne

Dollar Index: 93.88