- FOMC minutes suggest rates likely to remain unchanged for longer.
- Trump tosses out conciliatory trade comment about China
- USD trading slower on slightly improved risk sentiment.
USDCAD: open 1.4206, overnight range 1.4204-1.4245, close 1.4239, WTI 72.29, Gold 2952.55
The Canadian dollar opened almost exactly where it opened yesterday suggesting the recent price action was merely noise in a directionless currency environment.
The Canadian dollar’s direction remains at the mercy of external influences and the biggest one is President Donald Trump. The man has roiled global economics and geopolitics with his penchant for public comments.
However, Trump’s act is starting to wear thin. The “tariff-threat-of-the-day” is mostly dismissed as a negotiating ploy but even, so, traders are extremely cautious. Yesterday President Trump claimed to have a “great relationship with China President Xi Jinping and went on to say it would be possible to reach a new trade deal with China. That comment improved risk sentiment marginally.
Today, US weekly jobless claims are projected to increase by 2,000 to 215,000, while the Philadelphia Fed Manufacturing Survey is anticipated to decline to 20 from last month’s 44.3. In Canada, the New Housing Price Index and Raw Material Price Index are set for release.
EURUSD traded in a 1.0419-1.0444 range overnight. The prevailing sentiment suggests that Trump’s tariff rhetoric is more about securing trade concessions than launching a full-scale trade war, which helped lift risk appetite.
GBPUSD climbed in a 1.2579-1.2620 band overnight, maintaining a mild bid at the start of today’s session. The pair remains supported by recent UK economic data, particularly relatively robust inflation figures, which have reinforced expectations that the Bank of England will proceed cautiously before considering rate cuts.
USDJPY dropped to 149.95 from151.47 on renewed speculation that the Bank of Japan may raise interest rates as soon as July after the yield on Japan’s 10-year government bond climbed to 1.459%, its highest level since 2009.
AUDUSD rallied from 0.6328 to 0.6381 after stronger-than-expected Australian employment data. The economy added 40,000 new jobs, doubling forecasts of 20,000, while the unemployment rate ticked up to 4.1%, in line with expectations.
