- BoJ leaves rates unchanged-two dissents
- Trump and Xi Jinping speak today about trade and TikTok
- US dollar ending the week on a firm footing.
USDCAD open 1.3813, overnight range 1.3789-1.3820, close, 1.3797, WTI 62.98, Gold 3658.50
The Canadian dollar sank yesterday and again overnight after yesterdays weekly jobless claims and Philadelphia Fed survey results suggested the US employment market may not be as weak as previously thought.
The Canadian dollar didn’t react to the news that Prime Minister Mark Carney and Mexican President Claudia Sheinbaum met yesterday and agreed to work closely on negotiations over the pending US-Canada-Mexico trade deal.
Canadian retail sales for August are expected to show a monthly decline of 0.8% after July’s 1.5% rise. Excluding autos, sales are forecast at -0.7% compared with a 1.9% gain previously.
The US dollar strengthened broadly after the meeting, helped in part by traders covering short positions when the outcome was less dovish than expected. Traders are awaiting news from Trump’s call with Xi Jinping today.
Asian equities closed with little overall direction. Japan’s Topix slipped 0.35% following the BoJ announcement, Australia’s ASX 200 gained 0.32% in line with Wall Street, and Hong Kong’s Hang Seng ended flat.
As of 7:30 am EDT, European markets were mixed, with the CAC 40 up 0.22%, the DAX down 0.22%, and the FTSE 100 unchanged. S&P 500 futures were flat, the US Dollar Index was at 97.60, gold was $3649.15, and the US 10-year yield was steady at 4.138%.
EURUSD traded in a 1.1752-1.1793 range, with broad dollar strength keeping the pair on the defensive. Ongoing political concerns in France and the lingering impact of last week’s Fitch downgrade have dampened sentiment.
GBPUSD fell from 1.3560 to 1.3483 before edging back to 1.3505. The Bank of England kept rates unchanged and signaled little urgency for future cuts, while fresh concerns emerged after the ONS reported August public borrowing of £18.0 billion.
USDJPY consolidated between 147.20 and 148.11 after rallying in the wake of the Fed decision. The dip earlier in the session came after the Bank of Japan left rates unchanged, though two members favored a 0.25% hike on inflation grounds.
AUDUSD traded in a 0.6587-0.6620 range as the post-FOMC dollar demand carried over, with weaker risk sentiment adding pressure to the pair.
There are no US economic reports of note on tap.
