The Canadian dollar is consolidating Friday’s gains, garnering a modicum of support from rising energy prices.
USD/CAD traded lower, falling from Friday’s close of $1.2650 to $1.2607 in early Toronto hours.
The Canadian dollar will not benefit from domestic data until Friday at the earliest when the August Labour Force Survey is due. Analysts are forecasting a gain of 60,000 jobs.
In the meantime, Canadian dollar direction is determined by broad U.S. dollar sentiment and oil prices.
West Texas Intermediate (WTI) ticked higher overnight despite some chatter that today’s meeting of the Organization of the Petroleum Exporting Countries may finish with an announcement that November production will increase to 500,000 barrels per day, instead of the 400,000 b/day previously announced.
The global data calendar is devoid of top-tier economic releases today, leaving traders to seek inspiration elsewhere. FX traders did not find much to get excited about, and found plenty of reasons to sit on the sidelines.
China is on its Golden Week. Today, the U.S. may chastise China again when U.S. Trade Representative Katherine Tail speaks about the Biden Administration’s China trade strategy. She reportedly will say that America will enforce China’s commitments in the trade agreement.
China’s Evergrande Group was another source of discontent. Trading in its shares were halted on the Hong Kong exchange. There are reports that Hopson Developments is buying 51% of Evergrande Property services.
EURUSD is trading at the top of its overnight, $1.1589-$1.1635 range due to broad US dollar weakness, although firmer U.S. Treasury yields are acting as a drag on gains. European stock markets are trading sideways as the economic data calendar is empty.
Traders are also cautious as they await news of the next German government. The intraday EUR/USD technicals are bearish below $1.1660.
GBP/USD rallied on profit-taking as concerns about the UK fuel shortage started to fade.
USD/JPY gains ran out of steam at 111.30 and prices retreated. AUD/USD traded former ahead of what is expected to be a benign Reserve Bank of Australia monetary policy meeting tomorrow.
Rahim Madhavji is the President of KnightsbridgeFX.com, a Canadian currency exchange that provides better rates than the banks to Canadians
