- Fed December rate cut odds sore.
- Ottawa and Alberta talk pipeline.
- US dollar opens mixed to bid.
USDCAD open: 1.4113, overnight range 1.4102-1.4124, close 1.4107, WTI 58.62, Gold 4131.84
The Canadian dollar is still playing defense. The currency pair only saw limited benefit from Fed Governor Christopher Walker’s comments supporting a December rate cut. The currency also failed to benefit from Prime Minister Mark Carney’s announcement of a deal with Alberta to support a pipeline route to the West Coast.
Furthermore, news that Ottawa and Washington have no plans for trade discussions until the formal renegotiation of USMCA begins in the spring also weighed on the currency.
Traders boosted December rate cut odds after Fed Governor Christopher Waller said the current data shows a soft labour market and only limited inflation effects from tariffs. Then he said he currently supports a reduction at the December 10 FOMC meeting.
Asian equity markets were mostly higher, with Japan’s Topix slipping 0.21%, while Hong Kong’s Hang Seng gained 0.69% and Australia’s ASX added 0.14%.
As of 7:00 am, the FTSE 100 has risen 0.31%, the CAC-40 is up 0.18%, and the DAX is unchanged. S&P 500 futures are down 0.19%, DXY is at 100.15, the US 10-year yield is 4.026%, and gold is trading near $4134.42.
EURUSD traded in a 1.1511-1.1542 range in a directionless overnight session. Traders were cautious after talk of a Russia-Ukraine peace plan drew skepticism, particularly from French President Macron who said the proposal needed significant improvement and resembled a capitulation. German Q3 GDP met expectations, but analysts noted the country has managed only two positive quarters of growth in three years.
GBPUSD inched higher in a 1.3096-1.3141 range before easing to 1.3126 in early NY trading. The market is waiting for tomorrow’s UK Budget, with the general view that the fiscal package is unlikely to provide support for the currency, implying volatile trading ahead.
USDJPY traded between 156.14-156.98 as fears of FX intervention lingered and expectations for a December Fed cut firmed. A call between Trump and Prime Minister Sanae Takaichi produced nothing market-moving, but both sides emphasized continued close cooperation.
AUDUSD traded in a 0.6449-0.6470 band and remains biased to the downside unless it can rise above 0.6480. The currency is steady thanks to a cautious RBA outlook paired with renewed expectations for a US rate cut next month.
A heavy slate of US data is on deck, including ADP employment, September PPI, Retail Sales, housing prices, and November consumer confidence. Most of the numbers are dated, which puts extra weight on the confidence reading for a real-time signal.
