- ECB meeting ahead
- US inflation expected to rise
- US dollar recoups some losses
USDCAD open 1.3883, overnight range 1.3859-1.3885, close, 1.3864, WTI 63.34, Gold 3621.82
The Canadian dollar is trading near the bottom of its overnight range and with a bearish tone as it continues to underperform compared to AUD and NZD. The Loonie will continue to drift lower because of the deteriorating Canada/US trade relationship and because of a lack of viable new trading partners in the near term.
WTI oil prices held in a 63.10-63.80 band, supported by geopolitical tensions but capped by lingering oversupply concerns.
Attention turns to U.S. inflation again with CPI expected to rise to 2.9% in August from 2.7% in July, while core CPI is forecast to hold steady at 3.1% y/y. The results won’t shift expectations for next week’s Fed rate cut, but they will spark debate over whether the uptick is temporary or something stickier. Weekly jobless claims are projected to dip to 235,000 from 237,000.
Asian equity markets finished mixed. Japan’s Topix gained 0.22%, Australia’s ASX 200 slipped 0.29%, and Hong Kong’s Hang Seng lost 0.43%. By 7:15 am EDT, European stocks were higher with the CAC 40 up 0.87%, FTSE 100 up 0.52%, and DAX ahead 0.22%. S&P 500 futures added 0.21%. The U.S. Dollar Index rose to 97.98, gold eased to $3,620.49, and the U.S. 10-year yield held at 4.045%.
EURUSD traded negatively within 1.1677-1.1707 ahead of the ECB decision. Rates are expected to remain unchanged with hawks and doves likely to clash over the path forward. With policy still viewed as accommodative, no change is likely this year. Political uncertainty in France is also limiting gains.
GBPUSD drifted inside 1.3495-1.3540 as dollar strength weighed before today’s U.S. releases. Traders are now waiting on Friday’s UK data covering GDP, industrial output, manufacturing, and trade.
USDJPY held within 147.28-147.99 as investors considered whether Prime Minister Shigeru Ishiba’s resignation might disrupt BoJ rate hike plans.
AUDUSD moved in a 0.6599-0.6623 band on position adjustments ahead of U.S. data. Prices remain underpinned by reduced expectations that the RBA will cut rates in the near term.
