CAD remains steady as USD retreats
Daily Currency Update
The Canadian dollar saw little change so far this morning after inching back from the upper 1.37 mark yesterday as the USD retreated. Markets will be watching to see what the Federal Reserve’s rate decision this afternoon will be, which could cause some volatility in the CAD. In oil news, West Texas Intermediate (WTI) crude oil dipped slightly this morning to the 78.30 level, down from yesterday’s 80.24.Key Movers
The US Dollar Index fell by around 0.17% in the last day to trade near the 105.080 level. Markets are looking ahead to today’s Consumer Price Index (CPI) data release, which measures inflation pressures experience by consumers in their day-to-day lives. This CPI data is expected to show a 0.1% rise in headline prices, maintaining a 3.4% year-over-year gain. This outcome may influence the USD before the Federal Reserve’s rate announcement is released, although no major change in rates is expected. Fed Chairman Jerome Powell’s press conference is expected to focus on patience around rate cuts and the Fed’s commitment to price stability.The euro rose 1% against the weakening USD ahead of the Fed announcement, its biggest jump in 6 months. In Eurozone news, the EUR was slightly higher at around 1.08450 and the 10-year bond yield differential edged up to 61 basis points (bps) nearing the 62-65 bps range seen in recent years.
The GBP/USD pair rose 0.8% this morning to 1.2826, its highest level since March. This GBP strength came despite weak UK data releases. UK data showed soft growth trends in April as monthly Gross Domestic Product (GDP) was flat against expectations of a 0.1% drop, with weak manufacturing and construction numbers. The service sector rose 0.2% and the economy grew 0.7% in the April quarter which matched expectations.
The USD/JPY pair took a breath this morning after gaining for three consecutive days. The pair floated above the 156.00 mark but is likely to be impacted by US inflation data and the Fed rate decision.
Expected Ranges
- EUR/CAD: 1.47639 - 1.48500 ▲
- GBP/CAD: 1.75118 - 1.76049 ▲
- AUD/CAD: 0.907770 - 0.916690 ▲
- USD/CAD: 1.36800 - 1.37606 ▼