USD/CAD Open: 1.2558-62, Overnight Range: 1.2556-1.2587, Previous Close: 1.2556
WTI Oil is at $71.42 and gold is at $1,806.30. US markets are mixed today.
For today, USD resistance is at 1.2618. Support is at 1.2540.
• Oil rally fuels Canadian dollar gains
• ECB meeting ahead-expected to be dovish
• US dollar retreats as risk sentiment improves
The Canadian dollar consolidated yesterday’s gains overnight. The Loonie is supported by the rebound in crude prices and the positive shift in global risk sentiment.
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The S&P 500 index and WTI oil prices are back to where they were Friday. Gold prices have erased their latest safe-haven gains and are trading below minor support in the $1798.00-$1800.00 area.
Traders are far less worried about the spread of the coronavirus delta variant because fewer victims require hospitalization, and people with two-dose vaccines are relatively well protected.
West Texas Intermediate (WTI) extended yesterday’s rally and are trading at $71.00 in NY. Prices were driven to a level last seen at the end of May on Tuesday as traders feared spreading coronavirus delta-variants would derail the global economic recovery and reduce demand. Traders changed their mind as delta-variant hospitalizations were low, and oil prices bounced alongside a rebound in equity markets. The oil price gains boosted the Canadian dollar and other commodity currencies.
The ECB monetary policy decision and President Christine Lagarde’s press conference are as eagerly awaited as two-for-one hour at the corner pub. That’s because last week, Ms. Lagarde hinted that markets should prepare for new guidance “given the persistence that we need to demonstrate to deliver on our commitment.” A break on either side of 1.1750 or 1.1850 will likely lead to another 0.0100 point move.
GBPUSD climbed from 1.3662 in Asia to 1.3759 in early NY trading due to the rebound in risk sentiment and lifting all UK COVID-19 restrictions. GBPUSD needs to break above resistance in the 1.3775-1.3800 area or risk a drop to 1.3620.
Japan was closed for the Marine Day holiday and is closed Friday for Sports Day. USDJPY traded sideways in Asia, then rallied to 110.35 where it opened in NY, underpinned by the rise in US 10-year Treasury yields from 1.235% yesterday to 1.295% today.
AUDUSD rallied from 0.7344 to 0.7386. Traders ignored weaker than forecast NAB Business Confidence data, focussing on higher commodity prices, and better risk sentiment.
US weekly jobless claims, Chicago Fed activity index and existing home sales are ahead. The Canadian data calendar is empty.
Today’s Suggested Range USD/CAD: 1.2510 – 1.2610
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