Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.3890-1.4140
Euro 1.6120-1.6370
Sterling 1.8660-1.8910
WTI Oil (opening level) $76.63
The CAD/USD is opening at 1.4014 ( 0.7135 )
All eyes will be on the US Federal Reserve interest rate decision under new Chair Kevin Warsh later today. The US central bank is expected to leave its benchmark interest rate unchanged at a target range of 3.50% to 3.75% at the June meeting.
USD/CAD holds firmly above the 100-day simple moving average (SMA) and the Bollinger middle band, keeping the near-term bias bullish as price consolidates close to recent highs. The Bollinger upper band at roughly 1.4048 caps the immediate upside. A daily close above this barrier would open the way toward the 1.4100 psychological level.
On the downside, the first line of support emerges at the June 11 low of 1.3931. The next level is located at the Bollinger middle band near 1.3892, ahead of a deeper demand zone clustered around the 100-day SMA at 1.3740 and the lower Bollinger band near 1.3736, where a more significant pullback would be expected to attract buyers in line with the prevailing bullish structure.
Headlines
· .Iran is set to receive a USD 300 billion redevelopment fund as part of a 14-point draft memorandum, provided by the US and its allies. The US and Iran are set to sign an interim deal in Switzerland on Friday, granting Tehran broad economic incentives and allowing the immediate resumption of oil exports. Separately, Tehran threatened a “harsh response” if Israel doesn’t stop Lebanon attacks.
· UK May CPI came in at 0.2% MoM and 2.8% YoY versus 0.4%/3.0% expected and 2.8% in April. Core CPI was 2.6% versus 2.7% expected and 2.5% in April. Services inflation came in at 3.7% YoY versus 3.6% expected and 3.2% in April.
· US May housing starts slumped 15.4% m/m to an annualized pace of 1.177 million, the weakest since 2020 and far below all estimates, led by a 40.2% drop in multifamily starts. Permits fell 0.7% to 1.413 million.
· US May import prices rose 1.9% m/m and 6.7% y/y, while export prices rose 1.3% m/m and 11.2% y/y, all above consensus.
· Markets are also focused on the FOMC meeting, where rates are expected to be kept on hold in Kevin Warsh’s first meeting as Chair. He is not expected to submit a dot to the projections, having prominently criticized what he characterizes as the Fed’s excessive transparency. Citi meanwhile said the Federal Reserve will cut interest rates this year – potentially three times – as the labor market weakens and oil prices ease.
Key Points
· Equities: US tech cooled, Europe edged higher on banks, and Asia stayed split between chip strength and China weakness.
· Commodities: Crude extends slide on expectations of near-term supply surge; gold steadies above USD 4,300 ahead of FOMC.
· Fixed Income: Yields ease back on downdraft in crude oil prices.
· Currencies: SEK firm ahead of Riksbank meeting. USD choppy ahead of FOMC meeting.