- Canada GDP data unlikely to support Loonie.
- US and Iran resume talks in Qatar
- US dollar trading with a bit of a bid in early NY.
USDCAD open: 1.4236, overnight range 1.4200-1.4040, close 1.4210, WTI 71.11, Gold 4,023.89
The Canadian dollar traded negatively because of US dollar demand against the majors, with month end portfolio rebalancing doing much of the heavy lifting. The gains came even as risk appetite improved on the back of renewed US-Iran peace talks, though narrowing CAD/US interest rate spreads kept a lid on how far the loonie could benefit from that backdrop.
Canada's economy is projected to have rebounded in April, with growth pegged at 0.4% following March's 0.1% contraction as reported by Statistics Canada. The improvement should not be mistaken for a turning point. An official announcement on July 1 confirming that the CUSMA deal will not be extended carries real consequences for the growth outlook ahead.
WTI held within a 69.77-71.17 band as markets awaited the outcome of Iran-US talks in Qatar.
American and Iranian negotiators are in Qatar for another attempt at achieving a peace agreement, which has improved global risk sentiment slightly.
US consumer confidence and the Chicago PMI report will largely be overshadowed by May's JOLTS job openings figure, forecast at 7.3 million versus April's 7.618 million.
The second quarter wraps up with the MSCI All World equity index higher by more than 15%, the US dollar index gaining 1.9%, and gold posting its worst quarterly decline since 2013.
Asian markets finished the session with no clear direction. Hong Kong's Hang Seng dropped 0.63% on the day and closes out June down 8.54%. Australia's ASX 200 slipped 0.58% but still managed a monthly gain of 0.68%, while Japan's Topix added 0.32% overnight and climbed 1.05% across June.
European bourses are pushing higher as of 7:30 am. Germany's Dax has climbed 1.55%, France's CAC 40 is up 0.63%, and the UK's FTSE 100 has advanced 1.11%. S&P 500 futures point to a 0.15% gain, the 10-year Treasury yield sits at 4.387%, the DXY reads 101.35, and gold (XAUUSD) trades near 4,031.04.
EURUSD slid in a 1.1383-1.1428 band, pressured by broad dollar buying tied to month end flows and positioning ahead of US jobs data seen as supportive of further Fed tightening. German Retail Sales surprised to the upside, climbing 1.1% m/m in May against a forecast decline of 0.1%, though the market shrugged it off entirely.
Sterling found support inside a 1.3122-1.3262 range, holding above 1.3220 after UK GDP figures showed broad-based strength across construction, production and services. GBPUSD also benefited from optimism that the renewed US-Iran dialogue could yield results.
USDJPY climbed to a four-decade high overnight within a 161.89-162.41 range and remains near those levels heading into the New York session. Markets continue to brace for possible BoJ intervention, a threat that has loomed since the pair first broke above 159.00. Traders appear unfazed, partly because forces beyond the BoJ's control, including Tokyo's aggressive spending agenda and the hawkish tone from the June 17 FOMC meeting, continue to underpin the move. Any intervention would likely just hand traders a cheaper entry point. Should the BoJ choose to act, the July 3 US holiday could amplify the impact given thinner liquidity.
AUDUSD eased modestly within a 0.6865-0.6892 range as the US dollar found broad demand. RBA minutes reaffirmed the case for keeping policy restrictive, but offered nothing new and left the pair largely unmoved.
