Oil keeps Canadian Dollar Afloat
The Canadian dollar is hovering just above major support, in part, because of a resurgence in oil prices. West Texas Intermediate (WTI) has climbed from a low of $45.37/barrel on Monday to $46.97 today and that move has helped to cap USDCAD gains. The Canadian dollar is also receiving help from fading US rate increase expectations amid rising Canadian rates.
Oil prices extended yesterday’s gains. WTI rose from $46.41 to $46.87 on news that Saudi Arabia will reduce oil exports in August to 6.6 million barrels/day. In addition, Nigeria has agreed to production caps.
The overnight session was very quiet. That was due to a lack of top tier economic data releases and concerns about the looming Federal Open Market committee meeting on Wednesday.
Better than expected German IFO data helped to underpin EURUSD. For the record, IFO-Business Climate was 116.0 vs. forecast of 114.9, IFO Expectations 107.3 vs forecast 106.5 and IFO Current Assessment was 125.4 vs. forecast 123.8. EURUSD climbed to 1.1668 from 1.1631.
UK politics, Brexit and the FOMC’s intentions have handcuffed Sterling traders which kept GBPUSD trading inside a 1.3009-40 range.
In Asia, the minutes from last week’s Bank of Japan policy meeting were released. Members continue to be concerned about the low level of inflation but they didn’t offer any fresh insight. USDJPY dropped from 111.32 to 110.83. It recouped all those losses by the New York open.
Aussie and Kiwi were modestly firmer inside well-defined trading bands. AUDUSD traders are biding their time until the inflation report release on Wednesday and a speech by RBA Governor Lowe. NZDUSD traders are awaiting Trade data which is available just after New York closes today.
The US Case-Shiller Home Price Index is the only major data release today. That won’t be enough to generate much FX trading interest ahead of the FOMC meeting statement due Wednesday afternoon at 2:00 pm.
FX Ranges for major currency pairs