Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.3740-1.3990
Euro 1.5950 -1.6200
Sterling 1.8670 -1.8920
WTI Oil (opening level) $82.55
The CAD/USD is opening at 1.3865 ( 0.7212 )
The US Dollar Index extends losses for the third consecutive day, with bears testing levels at two-month lows below 99.40 during the European session.
The USD keeps bleeding as recent US data has prompted investors to reassess their expectations for immediate interest rate hikes by the US Federal Reserve .
Dollar Index showing a bearish near-term tone, with sellers pushing against the bottom of the last two months' trading range, looking at the 200-day SMA, at 99.15.
On the downside, the key support area is at the 200-day SMA at 99.15. Below here, May's bottom, in the 98.75-98.90 area, is likely to hold bulls ahead of April's lows, in the 97.70 area..
On the topside, a daily close above 99.40 would be the first signal of easing bearish pressure, while a stronger recovery through the 100.00 level would be needed to suggest a more durable shift back toward a constructive dollar bias.
Headlines
· The US consumer softened on two separate readings. July retail sales fell 0.6% on the month against consensus for a 0.1% rise, the first decline since October 2025, and the core control group used for GDP fell 0.4%, its largest drop since early 2025. The preliminary University of Michigan sentiment index fell to 51 in early August from 55.2, below expectations, with broad-based declines and year-ahead inflation expectations a touch higher at 4.3%.
· The US-Iran ceasefire expires today, following an Israeli strike in southern Lebanon and with fresh US sanctions on Iran expected. Speaking at a rally on Friday, President Trump called Iran "very evil" and told Americans to expect sustained high fuel prices, arguing the cost of the conflict was justified to keep Iran from a nuclear weapon.
· Japan's Q2 GDP grew 0.3% quarter on quarter, slowing from the first quarter and missing the 0.5% consensus, against a long-run average of 0.42% since 1980. In China, July M2 money supply growth came in at 7.7% year on year against 7.9% expected.
· The week is data-light until Friday. The FOMC minutes land on Wednesday alongside a USD 16 billion 20-year auction, and global flash PMIs arrive on Friday with Japanese national CPI. Those minutes are the main lead-in to Fed Chair Warsh's first Jackson Hole keynote on 27 to 29 August. July's FOMC left rates at 3.50% to 3.75% with three dissents in favour of a hike.
Key Points
· Macro: US spending and sentiment both undershot, softening the growth picture into a quiet data week
· Equities: US and Europe slipped Friday, Asia was mixed Monday, with Hong Kong stronger and South Korea closed.
· Volatility: Near-term protection sank to multi-month lows while longer-dated volatility declined to follow
· Digital Assets: Majors steadied over the weekend after an index-inclusion threat knocked the treasury proxies
· Commodities: Copper pressed record territory on supply strain while crude kept its geopolitical bid
· Fixed Income: Yields eased across the curve on soft producer prices and an orderly bond auction
· Currencies: Extremely rangebound market in G3 majors as markets look around for a catalyst.