- Ugly Canadian employment numbers will limit Loonie gains.
- Trump demanding coalition to open Strait of Hormuz
- The US dollar opens softer with Central banks in focus
USDCAD open: 1.3701, overnight range 1.3691-1.3730, close 1.3719, WTI 97.80, Gold 4975.49
The Canadian dollar has scraped out gains after sinking Friday after the very disappointing Canadian employment report.
Today, Canadian February CPI is expected to rise 0.6% m/m (previous 0%) while the annual result dips to 1.9% from 2.3%.
WTI oil prices chopped about in a 95.13-99.71 range. The Strait of Hormuz is closed but only to shipments destined for certain countries. A Pakistani tanker laden with crude sailed through the Strait unimpeded.
Trump is demanding NATO members help America open the Straits of Hormuz. He warned NATO forces face a “very bad future” if the allies do not come to his aid. He also wants China to help open the Strait, or perhaps the anticipated Xi Jinping/Trump meeting may not happen.
Asian equity markets finished the session with losses except for those in China. Japan’s Topix dropped 0.50%, Australia’s ASX 200 lost 0.39%, while Hong Kong’s Hang Seng rose 1.45%.
As of 7:10 am, European bourses are mixed. The UK FTSE 100 has gained 0.37%, the German DAX is up 0.18% and the French CAC 40 is flat. S&P 500 futures have climbed 0.72%, and the 10-year Treasury yield is 4.254%.
EURUSD traded in a 1.1414-1.1456 range and is sitting near the overnight peak in early NY trading. There haven’t been any material developments in Trump’s Iran war, so traders have shifted their focus to Tuesday’s ZEW German and Eurozone surveys ahead of Wednesday’s FOMC decision.
GBPUSD drifted 1.3226-1.3266 range. The prospect of steady US rates for longer and expectations that anticipated BoE rate hikes will also be delayed are weighing on prices. GBPUSD got a bit of a boost after the UK government announced plans to support households hit by rising heating oil costs.
USDJPY churned in a 159.18-159.75 range. The yen is not seeing much in the way of safe-haven demand because the Japanese economy is heavily reliant on imported oil and, for now, the risk of even higher crude prices is driving USDJPY direction. Traders are mindful of potential BoJ FX intervention if prices get above 160.00, and Finance Minister Satsuki Katayama said as much on the weekend.
AUDUSD rose in a 0.6981-0.7033 range and is at the overnight session peak in NY. The currency is underpinned by expectations the RBA will raise rates by 25 bps tomorrow and issue a hawkish statement.
Today’s US data includes capacity utilization and industrial production.
