USD/CAD Open: 1.3775-79, Overnight Range: 1.3730-1.3784, Previous Close: 1.3742
WTI Oil open at $83.77 and gold open at $1,969.56. US markets are lower today.
For today, USD resistance is at 1.3827. Support is at 1.3789.
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The Canadian dollar plunged yesterday and continued to fall overnight due to widespread demand for safe-haven US dollars.
Another wave of risk aversion sentiment washed over markets yesterday, following French President Macron’s call to widen the international coalition fighting the Palestinian Hamas and Fatah terrorists and other Iranian-sponsored terrorist organizations.
US Secretary of State Antony Blinken warned Iran that the US would act “swiftly and decisively” against Iran or its proxies if US interests in the Middle East are attacked.
The Canadian dollar is unlikely to get much, if any, support from today’s Bank of Canada monetary policy decision. The BoC is almost universally expected to leave rates unchanged due to recent data showing inflation slowed. The accompanying statement and press conference will reference slowing growth and easing in the labor market to justify the stance but warn rates will go higher if supported by incoming data.
The real focus is the outlook for the Fed on November 1, and the prospect of “higher rates for longer” will underpin the greenback and weigh on the Canadian dollar.
EURUSD traded negatively in a 1.0566-1.0607 range and failed to garner any support from a slightly improved German Ifo survey. The Business Climate component came in at 86.9 compared with 85.7 in September, while Expectations rose to 84.7 from 83.3.
GBPUSD continued to suffer from yesterday’s weak PMI data and is hovering near the bottom of its overnight 1.2114-1.2177 range. The negative GBPUSD sentiment stems from divergent growth outlooks between the US and UK.
USDJPY traded narrowly in a 149.79-149.94 band. The outlook for a hawkish leaning Fed decision next week and the stubbornly dovish BoJ continues to support prices.
AUDUSD bounced in a 0.6340-0.6400 range with prices peaking following the September inflation report. CPI ticked up to 5.4% y/y compared to the forecast of 5.3%, and that lifted the odds for an RBA rate hike next month. However, the gains evaporated quickly due to widespread US dollar demand.
There are no key US data reports on tap.
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