USD/CAD Open: 1.3685-89, Overnight Range: 1.3661-1.3700, Previous Close: 1.3691
WTI Oil open at $85.92 and gold open at $1,967.16. US markets are higher today.
For today, USD resistance is at 1.3768. Support is at 1.3709.
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The Canadian dollar appears to have dodged a bullet yesterday. USDCAD looked liked it would break through resistance in the 1.3750 area and kick off another rally with a 1.4000 target. Bond traders had other ideas.
The President of Pershing Capital, Bill Ackerman is known as a savvy investor. He predicted the rally in Treasury yields earlier this year so yesterday, when he said he had closed his short bond position, other traders took notice. When the dust had settled, the US 10-year yield had plummeted from 5.01% to 4.83%, and the US dollar dropped across the board.
The US dollar index (USDX) fell to 105.16 overnight from 106.35 yesterday.
West Texas Intermediate (WTI) oil prices retreated from $89.50/b on Friday to $85.08 in Europe today. However, this move was mostly due to the perception that the risk of Middle East crude supply disruption had eased because Israel delayed its ground assault into Gaza. That sentiment may be premature as French President Emmanual Macron is calling for an international coalition to fight Hamas and other terrorist groups.
Asian equity markets closed with modest gains while European bourses are in positive territory except for the UK FTSE 100 index which is close to unchanged. S&P 500 futures are up 0.57%.
Canadian dollar traders are biding their time until Wednesday’s Bank of Canada monetary policy announcement. The BoC is expected to leave rates unchanged but warn of another rate hike if inflation starts to rise.
EURUSD surged, rising from 1.0572 to 1.0670, as the US 10-year Treasury yield fell from 5.01% to 4.85% on Tuesday. This momentum carried into European trading. The rally peaked at 1.0696 overnight but ended after lackluster Eurozone PMI data. Manufacturing PMI dropped to 43 from its previous 43.4, and Services PMI fell to 47.8 from 48.7.
GBPUSD rose from 1.2134 to 1.2247, largely due to declining US Treasury yields yesterday, then drifted between 1.2234 and 1.2289 overnight. UK employment increased by 82,000 jobs in the three-month period ending in August.
USDJPY was range-bound, moving within a 149.32-149.83 band. October’s Manufacturing PMI (preliminary) remained steady at 48.5.
AUDUSD has been the best-performing G-10 currency since yesterday’s open, rising from 0.6331 to 0.6380. However, the rally paused following weaker-than-expected manufacturing and services PMI data
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