USD/CAD Open: 1.3594-98, Overnight Range: 1.3570-1.3605, Previous Close: 1.3584
WTI Oil open at $70.55 and gold open at $1,993.04. US markets are higher today.
For today, USD resistance is at 1.3580. Support is at 1.3568.
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The Canadian dollar is marking time in a well-defined range, which is not likely to change today as there are no US or Canadian economic reports on tap. Things will change starting Tuesday with the US inflation report, followed by the Federal Open Market Committee (FOMC) meeting on Wednesday.
In addition, it is a big week for European traders, as the European Central Bank (ECB), Bank of England, and Swiss National Bank (SNB) monetary policy meetings are on Thursday.
Traders are still evaluating the impact of Friday’s stronger-than-expected US employment data. Nonfarm payrolls rose by 199,000 in November, easily surpassing the forecast for a 180,000 increase and the October gain of 150,000. The unemployment rate dropped to 3.7% from 3.9%, while average hourly earnings rose 0.4%, compared to 0.2% previously.
Nevertheless, the data is viewed as not strong enough to force the Fed to raise rates on Wednesday, partly because the results were skewed by the end of the auto and Hollywood strikes. Also, it served to lower the odds of a March rate cut.
Canadian dollar gains are being hampered by the December plunge in oil prices. West Texas Intermediate is hovering just above the $69.20 low seen last week after traders ignored the latest OPEC production cuts. The expected surge in demand from a rebounding Chinese economy has not happened. Instead, Chinese November CPI (actual -0.5% vs. previous -0.2% y/y) and PPI data (actual -3% vs. -2.6% y/y) provided further evidence that despite stimulus actions by Beijing, the economy is stagnating.
EURUSD treaded water in a 1.0751-1.0779 range, with traders content to be sidelined until ahead of US CPI Tuesday, FOMC Wednesday, and the ECB meeting Thursday. Policymakers are sure to push back on hopes for a rate cut in March.
GBPUSD traded with a modest bid, rising from 1.2532 to 1.2580 in early NY. The UK employment report is due Tuesday, followed by Trade, GDP, Industrial Production, and Manufacturing Production on Wednesday, with the BoE meeting on Thursday.
USDJPY rebounded from an overnight session low of 144.81 to 146.46 after a Bloomberg article suggested that the BoJ would leave monetary policy unchanged in December.
AUDUSD drifted in a 0.6551-0.6583 range, with price action tracking US dollar sentiment.
The US economic calendar is empty today.
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