- US continues attacks on Iran
- BoC left rates unchanged, delivered upbeat outlook
- USD is trading sideways awaiting US retail Sales numbers.
USDCAD open: 1.4041, overnight range 1.4034-1.4054, close 1.4042, WTI 79.58, Gold 4,031.68
The Canadian dollar passed another quiet overnight session, with prices pressured by the residual effects of this week's benign US inflation reports and a drama-free Bank of Canada meeting.
The BoC held its policy rate at 2.25% on Wednesday, and its July Monetary Policy Report sounded noticeably more constructive on the economy. Officials see the conditions for a durable recovery starting to take shape, with exports set to lead growth and business investment picking up as firms adapt to tariffs, pursue new markets and shore up supply chains.
WTI bounced in a 78.91- 80.57 band overnight. Crude is holding steady because traders remain are betting that the latest flare-up between Washington and Tehran will not spiral into a longer, wider war.
Equity markets in Asia finished without a clear direction. Australia's ASX 200 ended flat, Hong Kong's Hang Seng gained 1.33% and Japan's Topix dropped 1.45%.
As of 7:40 am the German DAX has lost 0.89%, the French CAC 40 is down 0.95%% and the UK's FTSE 100 has dropped 0.34%. S&P 500 futures have lost 0.22%, the 10-year Treasury yield is 4.571%, and the DXY is 100.57.
EURUSD is rangebound in a1.1460-1.1477 band. Firm crude prices and the danger of the US and Iran conflict spreading are weighing on the single currency, while Warsh's repeated reluctance to call the inflation fight won left euro buyers without a catalyst.
GBPUSD dropped in a 1.3503-1.3545, weighed down my mixed to soft data. May GDP matched forecasts with a 0.1% m/m rise, reversing April's dip, but a 0.5% slide in Industrial Production, far worse than the 0.1% decline expected, drove prices lower.
USDJPY rose from 161.98 to162.22 after fresh American military strikes on Iran. Prospects of a longer war lifting crude outweighed the ever-present risk of BoJ intervention.
AUDUSD traded firmer in a 0.6986-0.7011 range. Prices are underpinned by the lingering effects of the benign US inflation figures. Australia’s consumer inflation expectations index eased to 4.7% from 5.5%.
Today’s US data includes June Retail Sales, weekly jobless claims, the Philadelphia Fed Manufacturing Index, NAHB housing market index and business inventories.
