- Hawkish FOMC minutes give greenback a lift
- Equity markets rebound after Nvidia earnings
- US dollar firmer across the board.
USDCAD open: 1.4053, overnight range 1.4042-1.4063 close 1.4050, WTI 59.79, Gold 4058.97
The Canadian dollar was already sinking when the FOMC minutes were released and it continued to do so overnight.
The Canadian dollar suffered further pressure after comments from Bank of Canada External Deputy Governor Nicolas Vincent, who pointed out that the country’s productivity performance has slipped badly compared with other G-7 economies over the last fifty years. He added that productivity growth from 2020 to 2023 is running at less than half the pace seen from 2000 through 2019.
WTI oil bounced around in a 59.27-59.96 band after news of Trumps latest Russia/Ukraine peace plan.
Today’s September Employment Report arrives under a cloud of doubt. Trump’s decision on August 2 to fire the head of the Bureau of Labor Statistics over what he called “rigged” July payroll data has left traders skeptical. If investors think the numbers lack credibility, the release may end up having little market impact.
Nvidia’s upbeat results were offset by the tone of the latest FOMC minutes, which revealed that although most policymakers were leaning toward additional rate cuts, several were opposed to acting in December. The lack of alignment kept markets cautious.
Asian equity markets followed the rebound in tech and closed higher. Japan’s TOPIX gained 1.66%, Australia’s ASX 200 rose 1.24%, and the Hang Seng was unchanged.
As of 7:35 am, European indices were also firmer and S&P 500 futures were up 1.06%. The US Dollar Index was at 100.32, the US 10-year yield sat at 4.147%, and gold traded near $4072.92.
EURUSD traded in a 1.1510-1.1542 range and the single currency moved sideways as traders waited for the US jobs data. Concerns about the reliability of the figures suggest the release may not influence price action in any meaningful way.
GBPUSD traded in a 1.3038-1.3085 range and the pair had a mild bid but remained weighed down by soft UK data and the Fed’s more hawkish signals. Gains are limited as markets look ahead to next week’s Autumn Budget.
USDJPY traded in a 156.89-157.78 range and climbed steadily on broad US dollar strength, then eased from the peak after BoJ board member Junko Koeda indicated support for a possible December rate increase, arguing that real rates need to return to equilibrium.
AUDUSD traded in a 0.6471-0.6492 range and drifted sideways with movement largely dictated by the broader US dollar tone. A minor lift came from reports suggesting China may consider new property-sector stimulus.
