Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.3650-1.3900
Euro 1.5840-1.6090
Sterling 1.8310-1.8560
WTI Oil (opening level) $102.34
The CAD/USD is opening at 1.3774 ( 0.7260 )
USD stands firm near a six-week high amid persistent geopolitical uncertainties and rising bets for an interest rate hike by the US Federal Reserve. Furthermore, a modest pullback in Crude Oil prices, along with Tuesday's softer-than-expected Canadian consumer inflation figures, undermines the commodity-linked Loonie. This, in turn, acts as a tailwind for the USD/CAD pair.
Headlines
· Canada’s headline inflation rose to 2.8% in April from 2.4%, a two-year high but below the 3.1% forecast, mainly on a 19.2% jump in energy that lifted transportation inflation to 7.6%. BoC’s trimmed-mean and median core measures fell to 2.0% and 2.1%, their lowest in five years. Food inflation eased to 3.5%, and shelter edged up to 1.8%.
· US 30-year yield hits highest since 2007 as investor concerns mount that accelerating inflation will force central bankers to raise interest rates, threatening to slow the US economy and lift borrowing costs for US home buyers and corporations.
· Trump warned US strikes on Iran could resume within days if talks with Gulf nations fail, adding to market volatility.
· US pending home sales rose 1.4% in April, a third straight gain and above the 1% forecast. Sales were up 3.2% year-over-year, with increases in the Northeast, Midwest, and West. NAR’s Lawrence Yun said buyers are cautiously returning despite higher mortgage rates and warned that without more housing supply, prices could outpace wages and hurt homeownership.
· The UN cut its 2026 global growth forecast to 2.5%, 0.2 ppts below January’s view and under the estimated 3.0% in 2025, citing inflation from the Middle East conflict. Strong labor markets, resilient demand, and AI-driven trade and investment provide some support, but the outlook stays weak. Energy price gains are boosting producers while pressuring households and firms. The US is seen growing 2.0% in 2026.
Key Points
· Equities: Equities slipped in the US and Asia as yields rose, while Europe held firmer on company-specific gains.
· Volatility: Bond rout, Nvidia earnings, higher yields pressure tech
· Digital Assets: Bitcoin stabilises, ETF flows soften
· Fixed Income: US treasury yields remain elevated after Tuesday surge. Japan’s yield curve flattens on strong demand for longest dated JGBs.
· Currencies: US dollar remains on strong side, Japanese yen trying to keep up with greenback
· Commodities: Brent holds above USD 110 as rising yields pressure gold, sugar gains on weather risks and ethanol demand