Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.3890-1.4140
Euro 1.6040 -1.6290
Sterling 1.8720-1.8970
WTI Oil (opening level) $76.90
The CAD/USD is opening at 1.4018 ( 0.7134 )
USD/CAD pair is expected to trade sideways as investors await the labor market data for July from both the USA and Canada, coming out this morning.
Investors will pay close attention to both datasets to get fresh cues regarding the Federal Reserve and the Bank of Canada’s monetary policy outlook.
USD/CAD is retaining a bearish near-term bias as price holds below the 20-period Exponential Moving Average (EMA) at 1.4062. However, the formation of a Bullish Flag chart pattern suggests that the overall trend is still bullish.
On the topside, immediate resistance is clustered between the 20-period EMA at 1.4062 and the channel top at 1.4076; a decisive break above that zone would open the way for an upside move towards 1.4200. On the downside, the lower boundary of the Bullish Flag channel at around 1.3902 will be the key support level.
Headlines
· The Trump administration imposed price floors and a 15% tariff on polysilicon products used in semiconductors and solar panels under Section 232, aiming to shield US producers from Chinese competition in the chip supply chain.
· Strait of Hormuz tensions resurfaced. Iran said it struck "hostile targets" near Qeshm Island, while a draft Iran-Oman deal would bar US and Israeli ships, require compensation from countries it considers hostile, and impose cargo-based penalties, with full reopening conditioned on lifting the US maritime blockade.
· US initial jobless claims rose 1,000 to 199,000, below the 202,000 forecast and near a 57-year low, a third consecutive week under 200,000. Continuing claims increased 24,000 to 1.801 million.
· US nonfarm unit labour costs rose 1.3% in Q2, matching Q1 but well below the 2.1% forecast, as compensation rose 2.7% and productivity 1.4%. The combination leaves inflation, not employment, as the swing variable for September.
· Japan's household spending fell 3.3% year-on-year in June, a seventh straight decline and the steepest, against expectations for a 1.0% rise. Month-on-month spending dropped 6.4%, the sharpest since January 2021.
· Euro area retail sales fell 0.3% month-on-month in June, reversing most of May's gain and missing the 0.1% rise expected. Annual growth of 0.7% was the weakest since July 2024.
· July payrolls land at 14:30 CET, consensus +80,000 after June's +57,000, with unemployment seen unchanged at 4.2% and average hourly earnings at 3.5% year-on-year.
Key Points
· Macro: Polysilicon tariffs and Hormuz uncertainty dominate as payrolls take over the session's direction
· Equities: US stocks slipped, Europe reached another record, while Asian markets traded cautiously ahead of US payrolls.
· Volatility: Equity vol kept compressing while oil vol jumped, payrolls now the session's single catalyst
· Digital Assets: Crypto equities and miners led losses while spot held, corporate treasuries moved in opposite directions
· Commodities: Hormuz doubts kept crude bid, gold consolidated its breakout and copper neared a record
· Fixed Income: Yields rose globally on oil, hawkish Fed reporting and heavy corporate bond supply
· Currencies: A firmer dollar broke the yen above its 200-day average ahead of US payrolls