Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.3860 - 1.3930
Euro 1.5920 - 1.6170
Sterling 1.8560 - 1.8810
WTI Oil (opening level) $90.76
The CAD/USD is opening at 1.3805 ( 0.7244 )
CAD holds minor losses against the USD this morning, as the USD/CAD pair trades just above 1.3800 after bouncing from two-week lows at 1.3765.
CAD, remains on track for a 0.7% rally this week, and the USD/CAD weekly chart is forming a bearish engulfing candle, which is a negative signal, with all eyes on August's employment figures from Canada and the US.
The 100-day SMA at 1.3920 is the first meaningful resistance that bulls would need to clear to ease the current downside bias and open the way for a more sustained recovery. On the downside, the pair might enter a fresh downside leg if it fails to hold the August 21 low at 1.3732.
Headlines
· The US Fed's Waller pivots dovish: Fed Governor Christopher Waller said his September rate decision will be “heavily influenced” by August CPI data due 11 September. He signalled willingness to hold rates steady if disinflation continues, prompting markets to price roughly even odds of a hike at the September meeting, down from near-certainty earlier in the week.
· US trade deficit widens sharply: The July goods and services trade gap expanded 24.4% month-on-month to $88.6 billion, the largest since early 2025, driven by an 11.4% surge in capital goods imports, primarily computers and semiconductors, reflecting the AI investment race.
· The ISM Services PMI showed strong momentum in August, with activity and demand both picking up. Solid growth alongside limited hiring supports the broader AI-productivity story. For the Fed, however, rising cost pressures were the main concern, putting even more focus on the August CPI ahead of the mid-September FOMC meeting. The ISM Services PMI rose 1.3 points to 55.4, above the 54.1 consensus. Business activity and new orders strengthened, while backlogs also increased. Meanwhile, prices paid rose to 72.6, above the 70 consensus.
· US-Iran conflict ongoing: The US carried out a second round of strikes against Iran this week, keeping oil prices elevated and stoking inflation concerns. President Trump said renewed attacks would be “short-lived,” offering some relief to markets mid-week.
· The BOE's Pill flags prompt hike: Bank of England Chief Economist Huw Pill said a “prompt” rate increase would be appropriate to prevent the Iran energy shock from embedding inflation, though he stressed it need not be the start of a prolonged hiking cycle.
Key Points
· Macro: A senior Fed voice softened on September as the jobs report comes into view
· Equities: US and European stocks rallied as rate fears eased, while Asian markets extended gains with technology leading.
· Digital Assets: Crypto equities surged as bitcoin reclaimed a key level on easing rate fears
· Commodities: BCOM heads for record weekly close as energy surges; Waller and softer dollar revive gold momentum
· Fixed Income: Global bonds rally, led by Japan’s government bonds
· Currencies: Recent JPY surge partially fades, USD weaker.