USD / CAD - Canadian Dollar Drifting

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- China cuts reserve requirement ratio (RRR) by 25 bps starting Dec. 5
- US bond and stock markets closing early today
- US dollar trading sideways in directionless market
USDCAD snapshot open 1.3341-45, overnight range 1.3320-1.3369, close 1.3338, WTI $79.63, Gold $1752.26
The Canadian dollar drifted aimlessly yesterday and overnight as traders were preferred to watch World Cup games or look for Black Friday deals.
Today is an unofficial holiday in America and stock and bond markets close early.
Asia equity markets were uninspired. Australia's ASX 200 rose 0.24% while Japan's Nikkei fell 0.35% in quiet trading. European markets have flipped from modest losses earlier to small gains in early NY trading. S&P 500 futures are unchanged.
The big news was the Peoples Bank of China (PboC) announcing a 25-bps cut in the reserve requirement ration (RRR) that takes effect December 5. The move was another attempt to jump-start a slumping economy in the face of surging covid cases. Stimulating the economy even as authorities lock down large swaths of the population due to Xi Jinping's Covid-zero policy, seems counter productive.
The Russia oil price cap discussions are continuing. The EU is discussing a higher-than-expected cap in the $65.00-$70.00/barrel range but there is a lot of disagreement between EU members. One issue is that a cap price being discussed doesn't really impact Russia as it is well above its cost to produce and is very close to where Russian crude is trading.
The oil price downside is limited due to talk that Opec could announce additional production cuts at next weeks meeting.
EURUSD is trading near the bottom of its overnight 1.0383-1.0428 range. Losses may be limited due to the latest German GDP data. The German economy remains robust with GDP rising by 0.4% in the third quarter of 2022. Furthermore, the GfK Consumer sentiment survey improved slightly to -40.2“suggesting that the crash in consumer sentiment appears to have come to an end.”
GBPUSD traded quietly in a 1.2074-1.2126 range and opened in NY nearly unchanged from yesterday. GBPUSD has fully recovered from the UK budget debacle in September and is close to its July peak. Prices are supported by the slightly dovish outlook for US interest rates.
USDJPY rose from 138.38 to 139.59. Tokyo CPI rose 3.8% y/y, compared to October's 3.5% reading which puts more stress on the Bank of Japan's yield curve control strategy.
AUDUSD opened unchanged from yesterday at 0.6743.
There are no US or Canadian economic reports today.











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