USD/CAD Open: 1.2344-48, Overnight Range: 1.2336-1.2397, Previous Close: 1.2368
WTI Oil is at $82.07 and gold is at $1,768.80. US markets are higher today.
For today, USD resistance is at 1.2416. Support is at 1.2369.
• FX traders embrace “risk-on”
• Oil prices continue to climb
• US dollar opens mixed, JPY and CHF lose, commodity currencies gain
The Canadian dollar added to yesterday’s gains as traders around the globe embraced positive risk sentiment.
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Wall Street closed with hefty gains on Thursday due to a mix of data and solid quarterly earnings reports. Weekly jobless claims fell 39,000 to 293,000, which is the lowest level since March 14, 2020. Traders liked the result, which supports the view that the US economy continues to rebound. Strong US bank earnings gave the S&P 500 index its best day since March.
The major Asia equity indexes closed with steep gains. Japan’s Nikkei 225 index finished with an increase of 1.81%, followed by a 1.40% rise in Hong Kong’s Hang Seng Index.
Those gains were helped by comments and actions by the Peoples Bank of China (PBoC), which took additional steps to stabilize markets. The PBoC injected $500 billion in 1-year Medium Loan Facility to offset a maturity of the same amount. Officials said that risks to the financial system from Evergrande were controllable. The PBoC also relaxed banks reduced the cash banks need to hold in reserve while also reducing mortgage limits.
European traders were less enthusiastic. The major bourses are higher but below their best levels and with gains well below those seen in Asia. US equity futures point to further progress on Wall Street today.
Rising equity indexes and another jump in oil prices gave the Loonie wings. USDCAD dropped to 1.2339 overnight, extending the slide from October 8, when it opened 1.2650.
WTI oil closed at $81.41 and climbed to $82.27 overnight. The EIA report that US crude inventories rose 6.0 million barrels was ignored. Traders were more concerned with global stocks. Organization for Economic Cooperation and Development (OECD) stockpiles are at their lowest levels since 2015. Even worse, the International Energy Institute (IEA) said oil demand will rise by 500,000 barrels/day.
EURUSD is traded in a 1.1589-1.1617 range, but dovish comments from ECB policymaker Pierre Wunsch helped cap gains and knock prices down to 1.1600 in NY.
GBPUSD benefits from positive risk sentiment and ongoing speculation that the Bank of England will need to raise rates earlier than previously expected. GBPUSD is in a mild uptrend above 1.3570.
Canada releases Wholesale Sales data for August, while the US data includes Michigan consumer confidence, Import/Export price index, NY Empire State Manufacturing Index, and Business Inventories.
Today’s Suggested Range USD/CAD: 1.2300 – 1.2400
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