Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.3730-1.3980
Euro 1.6000 -1.6250
Sterling 1.8700 -1.8950
WTI Oil (opening level) $82.95
The CAD/USD is opening at 1.3852 ( 0.7219 )
USD/CAD investors refrain from taking large positions ahead of the highly anticipated speech by Federal Reserve (Fed) Chair Kevin Warsh at the Jackson Hole Symposium.
Market attention is primarily focused on the signals Kevin Warsh could provide regarding the outlook for US monetary policy. Investors are particularly looking to determine whether the Fed is considering further monetary tightening as inflation remains persistent.
USD remains relatively stable. The US Dollar Index, holds above 99.00
CAD could remain vulnerable amid renewed trade tensions with the USA.
A further escalation in trade tensions could weigh on the Canadian economic outlook and limit the CAD’s ability to appreciate against the Greenback.
Investors are also awaiting Canadian GDP figures for the second quarter, due later today. Growth is expected at 3.4% YoY following a 0.1% contraction in the first quarter. A significant surprise in the growth figures could provide a fresh catalyst for USD/CAD, while the pair remains almost unchanged around 1.3845 for now.
Headlines
· Jackson Hole is the session's single reference point. Fed Chair Kevin Warsh delivers his first symposium keynote as chair and positioning has been built around a hawkish tone intended to anchor long yields. The speech lands 19 days before the 16 September FOMC, with money markets pricing roughly a one-in-three chance of a September move after a run of softer prints.
· Two Asian central banks moved the other way. Tokyo CPI excluding fresh food rose 1.8% year-on-year in August, accelerating for a third consecutive month and strengthening the case for a Bank of Japan increase, with September now in focus. The Bank of Korea delivered a back-to-back 25 basis point rise to 3.00% in a six-to-one decision, citing an unprecedented semiconductor boom driving stronger-than-expected growth.
Key Points
· Macro: Jackson Hole and Fed Chair Kevin Warsh’s speech are the session’s key focus
· Equities: US technology surged on earnings strength, Europe fell on French political risk, Asia traded cautiously ahead of Jackson Hole.
· Digital Assets: Bitcoin holds near 80k and a back-to-back weekly gain
· Commodities: Crude firms despite rising Gulf exports; gold holds below USD 4,600 ahead of Warsh speech; wheat and corn post strong weekly gains
· Fixed Income: Yields pull higher, still within recent range below cycle highs.
· Currencies: USD edges to local highs ahead of Fed Chair Warsh speech