USD/CAD Open: 1.3592, Overnight Range: 1.3569-1.3680, Previous Close: 1.3664
WTI Oil open at $86.14 and gold open at $1,858.36. US markets are higher today.
For today, USD resistance is at 1.3596. Support is at 1.3572.
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The Canadian dollar rallied in the wake of US and Canadian employment reports on Friday and extended the gains on Monday, even though the US and Canada were closed for holidays.
Statistics Canada reported that Canadian employment surged by 63,800 in September, which was more than triple the forecast of 20,000. The celebrations were muted because 66,000 of those jobs were from teachers returning to the classroom. Analysts quickly concluded that this data would not give the Bank of Canada any reason to raise rates later this month.
South of the border, the US nonfarm payrolls report easily topped expectations when it rose by 336,000, compared to the forecast of a 170,000 gain. However, fears that the data meant higher US interest rates were tempered by the drop in average hourly earnings.
Fed officials were also a tad dovish. Lorie Logan, Dallas Fed President, said that if the higher long-term rates were due to higher term premiums, the Fed would not need to raise rates. Vice Chair Phillip Jefferson agreed.
On Monday, news of the cowardly Hamas terrorist attack on Israeli women and children triggered a wave of safe-haven demand for Japanese yen, Swiss francs, and US Treasuries. Fears that Middle Eastern oil supplies would be disrupted lifted West Texas Oil (WTI) prices by over 6.0%.
Those fears faded overnight as the 10-year Treasury yield climbed off its low and yen and CHF pared gains.
The IMF raised its global inflation forecast from 5.3% to 5.8%.
EURUSD is choppy in a 1.0519 to 1.0612 band. Prices retreated from the peak after US 10-year Treasury yields climbed above 4.70% in early NY trading.
GBPUSD rallied from an Asian low of 1.2162 on Monday to 1.2262 in Europe today, supported by the dovish Fed comments. However, gains may be limited after the IMF said the UK would be the weakest G7 economy in 2024.
USDJPY bounced in a 148.18-149.30 range, with trading roiled by safe-haven flows and falling US treasury yields.
AUDUSD traded in a 0.6342-0.6433 range since Friday’s close, with better than expected Consumer Sentiment providing some support.
There are no top-tier US or Canadian economic data releases.
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