- Global risk sentiment ebbs and flows
- Weekly US jobless claims and Challenger job cuts on tap
- US dollar traded firm overnight but gave back gains in nearly NY trading
USDCAD open: 1.3901, overnight range 1.3859-1.3925, close 1.3897, WTI 94.61, Gold 4,4470.47
The Canadian sank during Asian hours as risk appetite deteriorated, then recouped some of those losses heading into the New York session. In addition, CAD/US interest rate differentials continue to underpin USDCAD.
Wednesday’s ISM services result added weight to the view that inflation remains a stubborn problem, effectively pushing any Fed rate cut to late 2026 at the earliest.
WTI crude reached an overnight high of 95.92 before easing to 95.13 in New York, underpinned by a larger-than-expected draw in US crude stockpiles. EIA figures showed inventories fell by 7.97 million barrels last week, nearly double the 3.27 million barrel decline recorded the week prior.
The US dollar attracted fresh safe-haven buying overnight, with geopolitical crosscurrents keeping traders on edge. A new Israel-Lebanon ceasefire was announced, yet the broader Middle East picture remained murky as Washington and Tehran weighed whether to resume hostilities, even as Trump insisted the talks were progressing smoothly.
Overnight, Asian equity markets moved decisively into risk-off territory. Hong Kong's Hang Seng shed 1.48%, Japan's Topix eased 1.11%, and the Australian ASX 200 slipped 1.13%.
As of 7:20 am the German DAX has gained 0.57, the French CAC 40 has risen 0.81%, while the UK FTSE 100 dropped 0.71%. S&P 500 futures are down 0.51%, the 10-year Treasury yield is 4.468%, and the DXY is 99.25.
EURUSD traded in a 1.1605-1.1634 range, recovering the ground it ceded during the Asian session once the initial risk-off wave subsided. Eurozone retail sales disappointed in April, (actual -0.4% forecast -0.3%). With Friday's US nonfarm payrolls looming, most participants appeared content to sit on their hands.
GBPUSD held a 1.3411-1.3443 range, with sterling mirroring the euro's recovery and reaching its session high heading into the New York open. Construction PMI came in at 38.2, down from April's 39.7, with the weakness attributed to higher energy costs.
USDJPY bounced in a 159.62-160.09 band as traders dared Japanese authorities to respond. Skepticism greeted reports of an internal BoJ discussion on a June rate increase, with many dealers arguing that tightening into an economy already absorbing the fallout from the US-Iran conflict would compound domestic strains.
AUDUSD consolidated in a narrow 0.7123-0.7140 band, finding modest footing after Australian trade data for March swung to a surplus of $1.8 billion, erasing the prior month's deficit in line with market expectations.
Todays US data includes Challenger Job Cuts for May and weekly jobless claims.
