Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.4110-1.4360
Euro 1.6100-1.6350
Sterling 1.8710-1.8960
WTI Oil (opening level) $70.79
The CAD/USD is opening at 1.4236 ( 0.7024 )
USD/CAD steadies as the USD strengthens on growing expectations of a hawkish Federal Reserve interest rate path, with traders now pricing in above 60% probability of a Fed interest rate hike by September.
Traders are looking ahead to Wednesday's US ADP employment data and Thursday's Nonfarm Payrolls (NFP) report for clues on the Federal Reserve's next policy moves. A stronger-than-expected jobs report could reinforce the Fed's "higher-for-longer" interest rate stance, potentially dampening appetite for risk-sensitive assets.
Canada’s Gross Domestic Product (GDP) data for May. coming out later this week,should give traders fresh signals on economic momentum. Market participants continue to expect the Bank of Canada to keep interest rates on hold through most of the year.
Headlines
· A top Iranian official reaffirmed Tehran’s resolve to control the Strait of Hormuz, keeping geopolitical risks elevated before talks resume in Doha, Qatar, with US Secretary of State Marco Rubio saying any tolls or fees for ships passing through the strait would be unacceptable. Tehran will send a delegation but said no direct talks with US officials are planned.
· Japan’s industrial production rose 0.5% m/m in May, matching April but below the 1.1% forecast, amid Middle East–related supply and energy risks. It was the second monthly gain, with strength in transport equipment, chemicals, and petroleum and coal products offset by weaker machinery and electronics. Output fell 1.7% y/y, the first decline in six months.
· Japan’s unemployment rate was unchanged at 2.5% in May 2026, matching forecasts and remaining the lowest since July 2025. Employment hit a record high and participation improved, while the jobs-to-applicants ratio slipped slightly to 1.17, indicating a still-tight but softening labor market.
· The Dallas Fed’s Texas manufacturing activity index was flat in June 2026, but outlooks improved, uncertainty eased, hiring and hours picked up, and price pressures were mixed. Firms remained optimistic, with the future activity index rising despite a slight dip in the future production index.
· Andy Burnham, to succeed Keir Starmer, pledged to devolve major fiscal powers from Westminster to local authorities while maintaining discipline, calling the imbalance between national and local resources a barrier to growth. He said he will name ministers only after the Labour leadership race ends.
· UK shop price inflation stayed at 1.2% y/y in June 2026, just under the 1.3% forecast, as food inflation fell to 2.4%—its lowest since March 2025—while non-food inflation inched up to 0.6%. The BRC cautioned that retailers still face rising costs from taxes, weather, and geopolitical tensions.
Key Points
· Equities: US tech rebounded hard, Europe stayed flat, Asia was mixed.
· Volatility: Equities rallied on Monday, vol retreated, SKEW held, with Sintra and NFP ahead this week
· Digital Assets: Crypto soft overnight, MSTR surged on Strategy's financing overhaul as MiCA deadline arrives tomorrow
· Commodities: Chicago grain futures slump ahead of key USDA reports; gold and oil remain on the defensive
· Fixed Income: US treasuries sideways, awaiting data.
· Currencies: USDJPY to new modern high amidst broad USD strength