(MENAFN- Baystreet)
USD / CAD - Canadian dollar stagnating
- Opec rumoured to be considering production cuts.
- Canadian inflation data due tomorrow.
- US dollar finishing the week with sharp losses.
USDCAD: open 1.3708-12, overnight range 1.3690-1.3728, close 1.3722, WTI $76.98, Gold, $1975.89
The Canadian dollar is stagnating and struggling to make any headway despite broad US dollar weakness against the major G-10 currencies.
The Canadian dollar barely acknowledged the jump in West Texas Intermediate oil prices from Thursday's low of $72.40/barrel to $77.40/b in NY today. The 6.9% rally is due to improved risk sentiment following last week's meeting between China President Xi Jinping and US President Joe Biden. The two men did not announce any major breakthroughs, but the fact that they were talking was seen as an indication that tensions were easing. Prices continued to grind higher today after Reuters published a story that said OPEC will be considering additional production cuts at a meeting next Sunday.
Canadian dollar traders are also awaiting Tuesday's inflation report. Canada's CPI is expected to have fallen to 3.2% from 3.8% in September, which should be enough to ensure the Bank of Canada leaves rates unchanged at its December 6 meeting. Governor Tiff Macklem is sure to address that outlook in his speech entitled“The Cost of High Inflation” in Saint John, New Brunswick, at 11:45 am ET on Wednesday.
Canadians will also hear about the Federal government's spending plans when Finance Minister Chrystia Freeland delivers her Fall update on Tuesday. The Liberal party has nearly doubled the country's debt since coming to power in 2015, raising it to $1.10 trillion from $612.0 billion, which Justin Trudeau described as“exercising fiscal restraint.” It should come as no surprise as Canadians elected the man who said,“I do not think about monetary policy.”
That means the Tuesday Fall update will be a non-event for traders.
EURUSD bounced in a 1.0897-1.0941 range. German Producer Prices dropped 11% y/y in October, which is the largest decline compared to the month earlier, since 1949, but mostly due to“base effects.” The news did not motivate traders who are content to await the FOMC minutes due tomorrow.
GBPUSD traded in a 1.2446-1.2510 range, supported by broad US dollar weakness but cautious ahead of the Chancellor's Autumn Statement on Wednesday and UK PMI data on Thursday.
USDJPY peaked at 150.00 in early Asian trading then dropped to 148.10 due to soft US Treasury yields and a report that Pimco has been buying yen for the past few months in anticipation of BoJ tightening.
AUDUSD inched higher in a 0.6501-0.6550 range, supported by improved risk sentiment following the Biden/Xi Jinping meeting and talk that the Fed has finished hiking rates.
The Canadian and US data calendar's are empty.
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