USD/CAD Open: 1.2332-36, Overnight Range: 1.2290-1.2344, Previous Close: 1.2320
WTI Oil is at $81.12 and gold is at $1,780.50. US markets are mixed today.
For today, USD resistance is at 1.2358. Support is at 1.2298.
The Canadian dollar reached a three-month peak in Asia but quickly sank under a wave of profit taking, in a thin market.
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Wall Street closed with the major indexes near record highs and that positive sentiment fed into early Asia trading. AUDUSD and NZDUSD continued to rally, and the Canadian dollar went along for the ride. The Canadian dollar got an added boost from West Texas Intermediate (WTI) oil prices which climbed to $83.91/barrel following the energy Information Administration report that US crude inventors decline by 430,000 barrels. Oil traders were expecting inventories to rise by 1.85 million barrels.
Asia equity traders became unnerved, in part due, to renewed concerns about contagion from China’s property developer’s financial problems. Evergrande Group resumed trading and its shares fell 14% even after officials said they received a 3-month extension for the Jumbo Fortune bond payment.
Japan’s Nikkei 225 index dropped 1.87% and Hong Kong’s Hang Seng index fell 0.46%. European equity indexes are down modestly due to negative risk sentiment and profit-taking. Wall Street is poised to open with small losses, although the indexes are still close to record highs. Oil and gold prices are also a touch lower compared to yesterday’s NY close.
US 10-year Treasury yields are within spitting distance of 1.70% and that put the breaks to the recent US dollar sell-off.
Yesterday, Statistics Canada reported inflation soared to an 18-year high in September, rising 4.4% compared to 4.1% in August. The news will be concerning to the Bank of Canada as the inflation gains were broad based. Canadian dollar traders did not react to the news.
EURUSD rallied to 1.1667 in Asia then dropped to 1.1633 just before NY opened. Gains were capped by the jump in US treasury yields, and by fears rising energy costs and supply chain issues will slow economic growth. A break below 1.1620 will negate the short term EURUSD uptrend.
GBPUSD failed to take out resistance in the 1.3830 area and prices dropped to 1.3787 before climbing to 1.3810 in NY.
Today’s US data includes weekly jobless claims (forecast 300k) and Philadelphia Fed Manufacturing Index (forecast 25, previous 30.7)
Today’s Suggested Range USD/CAD: 1.2280 – 1.2380
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