CAD slides alongside oil prices
Daily Currency Update
The USD/CAD pair ticks higher as oil prices cause the Canadian dollar to slide. At the time of writing the USD/CAD is trading at 1.3363. The Canadian government’s 10-year bond yields fell 4.6 basis points to 3.329%. Crude oil prices fell ahead of the US Federal Reserve meeting amid concerns about fuel demand growth in China and increasing supply from Russia. At the time of writing, crude oil is selling at 68.49, down from Friday’s close of 70.29. With oil prices down, the CAD slides against many other major currencies. In data releases, Friday’s jobs data report was a disappointment, reporting an employment change of -17,300. That still left Canada’s unemployment rate low at 5.2%. However, this report came after eight months of gains and elevated wage growth.Key Movers
USD slips against many other major currencies, apart from the Japanese Yen. This dip comes ahead of policy decisions this week from several central banks, including the Federal Reserve, who are expected to keep interest rates on hold for the first time since January 2022. The dollar index (DXY) is down to 103.652 at the time of writing. The market is waiting for the release of US Consumer Price Index (CPI) data tomorrow. If inflation comes in much higher than expected, it could affect the Fed’s current “pause” strategy in reference to interest rates.The Bank of England (BoE) monetary policy committee member, Catherine Mann commented that she sees services price inflation as a concern for achieving the 2% CPI target. She noted that wage increases of 4% would be a challenge to returning to the 2% CPI mark. The GBP has held steady this morning ahead of tomorrow’s job market reports that could set expectations for what the BoE may do next week.
The EUR is making small gains against the USD, currently trading at 1.07611 against the USD. In banking news, the UBS bank group has completed its takeover of Credit Suisse. New management changes were announced with Credit Suisse CFO and General Council leaving.
India’s inflation rate year-over-year was lower than expected for May. Inflation came in at 4.25% from the consensus of 4.42%.
The Japanese preliminary tool orders were down year-over-year with a reported -22.2% drop from the previous reading of -14.4%.
Expected Ranges
- EUR/CAD: 1.43263 - 1.43809 ▲
- GBP/CAD: 1.67423 - 1.67923 ▼
- AUD/CAD: 0.89944 - 0.90251 ▲
- USD/CAD: 1.33145 - 1.33693 ▲