USD/CAD Open: 1.2600-04, Overnight Range: 1.2585-1.2635, Previous Close: 1.2615
WTI Oil is at $68.51 and gold is at $1,815.60. US markets are higher today.
For today, USD resistance is at 1.2638. Support is at 1.2571.
• EURUSD lifted by Eurozone data
• China PMI data suggests economy is shrinking
• US dollar retreats as risk sentiment improves
The Canadian dollar had a choppy 24-hours. Prices bounced between 1.2568 and 1.2644 yesterday, then traded erratically inside that range overnight.
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The Canadian dollar reacted negatively after Canada’s June GDP was sharply weaker than expected. Q2 GDP fell 1.1% q/q rather than rise 2.5% q/q. The domestic economy did not weather the COVID-19 third-wave outbreak as well as analysts anticipated. The results suggest slower domestic growth ahead.
The Canadian dollar sank on the weaker GDP news, but the move was short-lived. Prices rebounded as risk sentiment improved.
Asia equity indexes closed with gains and a 1.38% rise in the French CAC 40 index is leading European bourses higher. S&P 500 and DJIA Futures point to a positive open on Wall Street today. US 10-year Treasury yields climbed to 1.321% from 1.277% yesterday. Gold and oil prices are a touch firmer.
Opec and friends are meeting in Vienna today. They are widely expected to confirm another 400,000-barrel increase in oil production, which was pre-announced. Oil traders are hoping that the weaker than expected China Caixin Manufacturing PMI report is just due to supply issues and not evidence that oil demand will slow.
EURUSD rejected a move above 1.1850 yesterday and retreated to 1.1795 overnight. Prices have risen to 1.1820 in early NY trading, supported by a mild improvement in risk sentiment and talk that the ECB may make a tapering announcement at next week’s meeting. Eurozone July unemployment dipped to 7.6% m/m which was offset by June’s results being revised higher to 7.8%. Eurozone Manufacturing PMI was a tad softer than expected, but it was due to supply issues.
The EURUSD technicals are bullish above 1.1770.
GBPUSD traded in a 1.3733-1.3765 range and is near the top in NY trading. Prices got a bit of support from UK Manufacturing PMI data. GBPUSD needs to break above 1.3800 or risk further 1.3650-1.3750 consolidation.
AUDUSD rallied from 0.7310 to 0.7348 on improved risk sentiment, and after Australia, GDP rose 9,6% y/y compared to the forecast of 9.2% y/y. The news is surprising due to the recent COVID outbreak in the country.
US ISM Manufacturing, Construction Spending and ADP employment are due today.
Today’s Suggested Range USD/CAD: 1.2550 – 1.2650
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