- Traders ignoring latest flare-up between US and Iran
- Markets are looking ahead to US inflation numbers Tuesday and Wednesday
- US opens a tad lower in NY
USDCAD open: 1.4141, overnight range 1.4127-14175, close 1.4155, WTI 73.15, Gold 4,068.67
The Canadian dollar is edging higher to start the week. Friday's employment report was better than expected but not enough to alter the interest rate outlook. The Canadian dollar is benefiting from an improvement in risk appetite after this weekend's exchange of US and Iranian missile and drone strikes failed to trigger a broader conflict.
The Bank of Canada takes centre stage on Wednesday with its interest rate decision, accompanied by an updated Monetary Policy Report.
WTI oil traded in a 72.61-75.06 range overnight and was sitting at 73.73 in New York. Prices remain supported by Iran's closure of the Strait of Hormuz.
With markets relegating the US-Iran conflict to little more than a regional flashpoint, attention is shifting back to the economic calendar.
This week's focus is squarely on US inflation, with CPI due Tuesday, PPI on Wednesday, followed by Kevin Warsh's testimony to Congress. A parade of FOMC officials will also be on the speaking circuit, offering their latest views on the economy and the outlook for interest rates.
Asian equity markets reacted cautiously to the renewed Middle East tensions. Hong Kong's Hang Seng added 0.16%, Australia's ASX 200 finished unchanged, while Japan's Topix declined 0.71%.
As of 7:45 am, European equity markets were slightly higher. The German Dax and French CAC 40 are up 0.21%. The UK FTSE 100 is flat. S&P 500 futures were down 0.30%, the US 10-year Treasury yield stood at 4.578%, and the DXY index was 100.90.
EURUSD traded within a 1.1385-1.1446 range. The pair hit its overnight low during the Asian session following reports of the latest US-Iran attacks. Selling pressure eased as traders concluded neither side was seeking a wider conflict, despite Iran's declaration that the Strait of Hormuz was closed. Reports that diplomatic discussions would continue also helped improve market sentiment and pushed oil prices lower.
GBPUSD bounced in a 1.3367-1.3412 range. Sterling largely tracked the euro higher while receiving additional support from rising Gilt yields. Investors remain concerned that Andy Burnham, who is expected to become UK Prime Minister on July 17, will introduce an expansionary budget.
USDJPY rallied in a 161.70-162.36 range. The rally was sparked by Reuters claiming that the Japanese government denied any immediate plans to alter state pension fund allocation rules.
AUDUSD traded within a 0.6934-0.6970 range. Price action tracked shifting market risk sentiment, but last week's hawkish remarks from RBA officials continued to provide the some support.
