- Global risk sentiment sours
- Trump accepts GOP presidential nomination.
- US dollar gains across the board, except vs JPY and CHF.
USDCAD: open 1.3720, overnight range 1.3701-1.3721, close 1.3705, WTI $81.16, Gold, $2416.28
The Canadian dollar is drifting lower after a massive tech outage affected major companies world-wide including banking and air travel. That news combined with concerns about renewed trade tensions with the US if (when) Donald Trump becomes president, also underpinned prices.
Canadian Retail Sales are on tap. They are expected to have fallen by 0.6% m/m in May while retail sales-ex-autos are expected at -0.5% m/m, compared to 1.6% in April. The results will not have much impact on USDCAD trading.
WTI oil prices are steady in a 80.49-81.34 range. The downside is supported by increased middle east tension after Houthi rebels fired missiles at Tel Aviv.
It’s official. Donald Trump is the Republican party’s nominee to run for president. He looked hale and hearty compared to a frail and fragile Joe Biden and markets are preparing for President Trump, 2.0.
Asian equity indexes followed Wall Street’s lead and closed in negative territory. Australia’s ASX 200 fell by 0.81%. European bourses are faring just as poorly with the German Dax, which is down 0.52%. S&P 500 futures are close to unchanged and the US 10-year Treasury yield sits at 4.19%
EURUSD consolidated yesterdays rally in a 1.0876-1.0902 range. Traders were a little put out when the ECB President refused to give any signals about future decisions. ECB policymakers were chirping away. Max Muller said they need to gain more confidence that inflation is heading to 2.0%. French central bank President Francois Villeroy said that future rate decisions would be data dependent.
GBPUSD dropped from 1.2955 to 1.2901 as the wave of global risk aversion and soft data weighed on prices. Retail sales fell 1.2% m/m in June (forecast -0.4%), mainly due to inclement weather while the GfK Consumer Confidence index improved modestly. (actual -13, previous -14).
USDJPY traded in a 156.95-157.88 range. Japan’s National CPI was unchanged at 2.8% y/y in June, which to some analysts suggests that the Bank of Japan could justify a rate hike in August.
AUDUSD traded with a negative bias in a 0.6687-0.6710 band. Prices were weighed down by weak commodity prices and a bout of risk aversion, although speculation that the RBA could raise rates in August, provided some support.
