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USD / CAD - Canadian Dollar Trading Sideways
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- Russia escalates tensions with Gazprom“force majeure” declaration
- Reports ECB pondering 0.50 bp rate hike on Thursday
- US dollar trading defensively as US equity futures climb
USDCAD Snapshot open 1.2944-46, overnight range 1.2932-1.2988, close 1.2984, WTI oil $102.25, Gold $1713.23
The Canadian dollar is trading choppily inside a wide USDCAD range of 1.2900-1.3070 as ever-shifting risk global risk sentiment roils markets.
The Canadian dollar is having an“on again-off again” relationship with oil prices. Yesterday, the Canadian dollar rallied even as West Texas Intermediate (WTI) slid to $95.88/barrel. WTI rallied overnight, underpinned by ongoing fears that global demand will continue to outstrip supply and by President Biden's failure to secure a commitment for increased production by Saudi Arabia.
Supply concerns were exacerbated after Russia declared“force majeure” on gas deliveries. That means they do not have to fulfill contracts because of“unforeseen circumstances.” Arguably punitive sanctions against Russia because of its invasion of Ukraine are not“unforeseen circumstances”, but are inevitable. The move occurs as the EU and the Euro area are suffering from a record-breaking heatwave.
Oil prices got another lift when TC Energy declare“force majeure” on its Keystone Pipeline shipments due to a power outage in South Dakota.
Global equity markets are mixed. Japan's Nikkei 225 index rallied 0.65% as trader returned from a long weekend. Australia's ASX 200 dipped on a weak earnings report from BHP. European bourses are flitting around unchanged while S&P 500 futures are 0.85% higher. The US 10-year Treasury yield is flirting with 3.0%.
EURUSD soared to 1.0269 from 1.0121 and is drifting at the top in NY following speculation of a 0.50% ECB rate hike on Thursday. Euro area inflation rose 8.6%, as expected.
GBPUSD traded in a 1.1927 to 1.2039 range, supported by broad US dollar weakness and a mixed to bullish UK employment report.
USDJPY traded defensively in a 137.50-138.38 range ahead of tomorrows Bank of Japan monetary policy meeting. No changes are expected.
AUDUSD climbed in a 0.6804 to 0.6901 band, underpinned by hawkish RBA minutes and modestly firmer commodity prices.
Deputy Governor Michele Bulloch indicated that not only do rates have to rise to neutral, neutral is a fair bit higher than where rates currently sit.
NZDUSD rose due to positive risk sentiment and higher commodity prices, climbing from 0.6143 to 0.6235.
Today's data includes US Building Permits and Housing Prices.
Learn how KnightsbridgeFX can help you save up to 2% when buying or selling US dollars compared to your Canadian bank's rates – click here to compare bank rates
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