USD/CAD Open: 1.3815-19, Overnight Range: 1.3814-1.3852, Previous Close: 1.3826
WTI Oil open at $82.86 and gold open at $1,997.57. US markets are higher today.
For today, USD resistance is at 1.3892. Support is at 1.3855.
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The Canadian dollar is drifting aimlessly and largely an “after-thought” in global FX markets. USDCAD has been trapped in a 1.3780-1.3880 range for the past week, and that won’t change today.
Bank of Canada Governor Tiff Macklem reiterated comments from his post-monetary policy press conference when he addressed the House of Commons Standing Committee on Finance yesterday. (He repeats the process to the Senate on Wednesday).
What was different was that he blamed high government spending for the slow decline in inflation when he tactfully said, “More focus by governments on the inflationary consequences of their spending decisions would be helpful.” You would think Mr. Macklem was fully aware of the consequences of massive government expenditures on inflation, so why raise the issue now and not when the spending plans were being announced?
Meanwhile, Bank of Japan policymakers upset traders after they leaked a story to a business journal about a yield curve control change which didn’t happen. The Nikkei published a story saying that the BoJ would allow bond yields to temporarily rise above the 1.0% cap, just hours before the monetary policy meeting. Traders positioned themselves for such a move then scrambled to reverse the trades when the change was only a tweak. Instead of a 1.0% yield curve control cap, 1.0% became a reference rate. USDJPY screamed higher, rising from 149.03 to 150.79.
EURUSD traded higher, moving from 1.0591 to 1.0675, after the release of inflation data that fell below expectations, and underpinned by EURJPY demand. The Q3 Harmonized Index of Consumer Prices (HICP) rose 2.9% y/y, which was under the predicted 3.1% and significantly lower than the 4.3% seen in the second quarter.
GBPUSD finds itself at the upper end of its 1.2137-1.2200 trading range, with prices supported by GBPJPY buying and broad US dollar weakness. The market’s attention is now turning to the Bank of England’s meeting scheduled for Thursday.
AUDUSD climbed from 0.6341 to 0.6377, bolstered by a surge in AUDJPY trading and improved risk sentiment.
Today’s US data includes Employment Cost Index (ECI), Chicago PMI, Consumer Confidence, and the Housing Price Index.
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