Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.3960-1.4210
Euro 1.5920-1.6170
Sterling 1.8680-1.8930
WTI Oil (opening level) $90.66
The CAD/USD is opening at 1.4087 ( 0.7099 )
Crude oil extended its rally, rising as much as 2.5%, its highest since early June, after Iranian-backed Houthi militants struck two Saudi tankers in the Red Sea. Oil is up close to 30% this month.
The price reflects the US-Iran conflict, the Houthi threat to Red Sea shipping through the Bab el-Mandeb Strait, and Tehran's dismissal of peace talks.
Gold is consolidating a near 2% gain from the prior session as dip-buyers returned despite firmer US yields and a stronger dollar, with energy-driven inflation risk and Middle East safe-haven demand offsetting those headwinds.
Headlines
· The US-Iran conflict escalated further, with US Central Command launching fresh strikes on Iranian military targets on Wednesday evening and both sides playing down the prospect of near-term talks. Iran-backed Houthi militants claimed responsibility for striking two Saudi oil tankers in the Red Sea, prompting more vessels to divert from the Bab el-Mandeb Strait and creating what analysts describe as a two-chokepoint problem for oil. The result was a fresh risk premium in crude and a renewed market focus on inflation.
· Rising oil prices have revived talk of a Fed rate hike, with rates markets now beginning to treat next week's meeting as a live decision after the 10-year yield pushed back toward its year-to-date high. In Asia, Bank of Japan officials are reportedly open to raising rates faster than the consensus expects, as persistent yen weakness feeds upside inflation risk, though the BOJ is still seen holding at its 31 July meeting. Bank Indonesia surprised markets by keeping its policy rate at 5.75% after two months of aggressive hikes.
· Attention in Europe turns to the ECB's policy decision later today, following a firmer German ZEW sentiment print earlier in the week. In the US, the House passed a 95-billion-dollar Republican-only budget proposal in a narrow 216 to 214 vote, a first step toward fast-tracking Iran war-related spending, which House Democrats unanimously opposed.
Key Points
· Equities: U.S. stocks softened, Europe advanced broadly, and Asian markets rallied as renewed AI spending lifted Korean chipmakers.
· Volatility: VIX eased back below 17 as the chip bid returned, with Intel earnings and the ECB the next tests
· Digital Assets: Crypto spot eased overnight while miners diverged higher and a Korean group bought into the sector
· Commodities: Oil extended its rally as Red Sea tanker attacks deepened the supply-risk premium, with gold holding firm
· Fixed Income: Treasury yields held near cycle highs as oil-driven inflation fears kept a Fed hike on the table
· Currencies: The dollar eased while the yen stayed pinned above 163 on Bank of Japan hike speculation