(MENAFN - Baystreet.ca) The Canadian dollar has been stuck inside a $1.3010-$1.3090 range for the past week and even yesterday's Canadian inflation report didn't garner much price activity.June Consumer Price Index came in close to expectations but remained at the Bank of Canada's target range.The news should have kept the focus on Canadian dollar upside as it supports the view that the Bank of Canada need not hurry to adjust monetary policy from its current neutral stance.
Elsewhere, the U.S. dollar came under selling pressure sparked by the latest report from the International Monetary Fund.The IMF said that the greenback was overvalued by 6% to 12% based on near-term economic fundamentals and that gave traders an excuse to sell greenbacks.
The U.S. dollar started sliding and continued to do so overnight, opening in Toronto with losses across the board, against the major G-10 currencies.The only exception was the Canadian dollar, which opened at the same level as yesterday.
The Australian dollar rallied following the release of employment data.Australia's employment change was flat, and the unemployment rate was unchanged at 5.2%.However, the good news was a 21,100 increase in full-time jobs, and that was enough to trigger AUD/USD demand.However, the report was not strong enough to counter fears of additional interest rate cuts and the rally stalled at 0.7037.The New Zealand dollar rallied alongside AUD/USD supported by broad U.S. dollar weakness.
USD/JPY extended Wednesday's losses in Asia and Europe.Prices were undermined by a drop in U.S. Treasury yields and the IMF story.However, prices staged a rally in early Toronto trading today, but the move was short-lived.
EUR/USD chugged higher during the overnight session, but the rally came off the rails after a report that the European Central Bank may adjust its inflation goal.Bloomberg reported that the ECB might be considering replacing inflation targets with price-level targeting.EUR/USD collapsed from $1.1243 to $1.1205.They have since recovered to $1.1220.
GBP/USD was the biggest mover thanks to U.S. dollar weakness, Brexit news and economic data. UK Retail Sales were surprisingly strong in June rising 1.0% compared to the forecast for a 0.3% decline.GBP/USD rallied and then got an added boost after the U.K. House Speaker accepted an amendment for a vote on preventing the next prime minister from shutting parliament to force a "no-deal" Brexit.
Today's U.S. data includes Jobless Claims and the Philadelphia Manufacturing Index. Also, Wall Street developments may impact FX sentiment as Q2 earnings reports get released.
Rahim Madhavji is the President of KnightsbridgeFX.com, a Canadian currency exchange that provides better rates than the banks to Canadians