The Canadian dollar is in a "Groundhog Day" loop. The overnight price action is identical to what occurred on Wednesday.
The only thing missing is the weather-predicting rodent.
USD/CAD is stuck in a $1.2580-$1.2680 range, with a break on either side yielding another 0.0100 points. Prices are supported by speculation the U.S. Federal Reserve may start tapering sooner than anticipated and lingering geopolitical tensions due to China and Afghanistan. On the other hand, downside pressure stems from the rebound in oil prices from recent lows and hopes for dovish words from Fed Chair Jerome Powell tomorrow.
The Canadian election is in full swing, and international investors largely ignore it.
Overnight, the major Asian equity indexes closed with losses except Japan’s Nikkei 225, which was unchanged. European bourses are all in the red, while S&P 500 and DJIA futures are flat. U.S. 10-year Treasury yields have held on to gains and are at 1.347%.
U.S. weekly jobless claims are expected to be 350,000, a tick higher than the 348,000 seen last week. Q2 Gross Domestic Product is expected at 6.8%, with a risk the results could be higher by increases in private consumption and inventories.
EUR/USD traded firmer in a $1.1758-$1.1778 range and is at the session peak in New York. The gains occurred despite weaker than expected German GfK consumer confidence. Traders are hoping Fed Chair Jerome Powell maintains his dovish outlook in tomorrow’s speech..
Rahim Madhavji is the President of KnightsbridgeFX.com, a Canadian currency exchange that provides better rates than the banks to Canadians
