- Iran attacks tanker in Strait of Hormuz-No reaction from US
- Saudi’s slash crude prices for Asian buyers
- US dollar opens with modest gains across the board
USDCAD open: 1.4216, overnight range 1.4202-1.4222, close 1.4206, WTI 69.24, Gold 4,131.74
The Canadian dollar traded quietly with traders awaiting developments from Trump and the NATO summit. FX market activity also suffered from a dearth of actionable top-tier economic data.
Yesterday, the Bank of Canada's Business Outlook Survey and Consumer Expectations Survey pointed to elevated consumer inflation expectations and climbing business input costs, constraints that leave the central bank little room to cut rates even as the broader economy cools. Worth noting, the survey was conducted before oil prices tumbled from the mid-$90s to below $70.00 a barrel today.
WTI shrugged off the latest Strait of Hormuz flare-up, trading in a 68.62-69.74 band. Saudi Aramco announced yesterday an $11.00 a barrel cut to the price of crude it sells into Asia, leaving it $1.50 a barrel below the average for Oman and Dubai benchmarks.
Asian equity markets closed with losses. Hong Kong's Hang Seng down 0.51%, Japan's Topix off 0.97%, and Australia's ASX 200 lower by 0.31%.
As of 7:20 am, the French CAC 40 is up 0.24%, the UK's FTSE 100 has gained 0.27%, while Germany's Dax has dropped 0.59%. S&P 500 futures are down 0.23%, the 10-year Treasury yield sits at 4.49%, and the DXY is 100.92.
EURUSD churned in a narrow 1.1423-1.1449 band with little economic data or headline flow to give it direction. Germany's May industrial production climbed 0.9%, well ahead of the 0.2% forecast, but the market barely blinked. France's pending court ruling on whether Marine Le Pen can seek office carries plenty of domestic weight, though it has no bearing on the single currency.
GBPUSD held firm near the top of its 1.3369-1.3402 range, buoyed by EURGBP selling, firmer equities, and an improving housing backdrop. The Lloyds House Price index jumped 0.9% month-on-month versus 0.2% prior. Offsetting the good news, the Office for Budget Responsibility cautioned that tax hikes or spending cuts will be needed to keep the country's debt trajectory in check.
USDJPY slid to a 161.68-162.18 range after Tokyo pushed back on media reports suggesting it was engineering low interest rates to support its fiscal expansion plans. Crude prices holding below their pre-Iran war peak and a pullback in JGB yields added further weight to the pair.
AUDUSD sat mid-range between 0.6935 and 0.6961. Weaker equity markets and renewed friction in the Strait of Hormuz capped any advance, while recently cooler inflation data has dialled back expectations for additional rate hikes, another factor keeping gains in check.
Canada’s Ivey PMI report along with Canada and US Trade data and are ahead.
