- FX markets marking time ahead of BoC and Fed rate decisions, Wednesday
- Oil prices are steady but firm
- US dollar trading with a small bid.
USDCAD open (6:00 am): 1.4021, overnight range 1.4009-1.4028, close 1.4011, WTI $101.83, Gold $4,002.24.
The Canadian dollar spent the night in a coma, due to a lack of motivation ahead of the Bank of Canada and Fed interest decisions tomorrow. The US dollar picked up a modest safe-haven bid on stalled US-Iran talks and fresh Houthi drone activity targeting Saudi Arabia.
WTI is relatively firm in a $100.62-$102.82 range. Saudi-led forces reported shooting down four Houthi drones bound for southern Saudi Arabia, enough to keep a floor under crude, but without any fresh escalation to send prices higher.
Anthropic’s IPO gave global risk appetite a lift, while Meta’s plan to raise nearly $98 billion through a share sale served as a reminder of just how expensive AI infrastructure is. Microsoft drove the point home with plans to offer buyouts to 60,000 employees. Who needs headcount when AI can do the work?
Asian markets finished on a mixed note. Japan’s Topix advanced 0.61% and Australia’s ASX 200 added 0.46%, but Hong Kong’s Hang Seng slipped 0.73%.
As of 7:20am, France’s CAC 40 is 0.45% higher and Germany’s DAX has added 0.34%, while the UK FTSE 100 has dropped 0.61%. S&P 500 futures are up 0.30%, the US 10-year yield stands at 4.97%, and the DXY is 102.20.
EURUSD is testing the bottom of a 1.1136-1.1179 range. A firmer greenback and nerves ahead of tomorrow’s FOMC decision and Thursday’s ECB meeting have kept traders on the sidelines, and the prospect of a hawkish Fed paired with a mild-mannered ECB is dragging on the single currency.
GBPUSD is under pressure in a 1.3307-1.3350 band, hemmed in by broad US dollar strength, FOMC jitters and nerves ahead of Wednesday’s UK Budget. The BRC Shop Price Index jumped 2.1%, well above the 1.6% forecast and September’s 1.4%, but traders paid it no attention.
USDJPY is hovering near the top of a 157.42-157.88 range, buoyed by demand for US dollars ahead of the FOMC and Friday’s BoJ meeting, where policymakers are expected to stand pat. Firm oil prices are adding to the support. Finance Minister Satsuki Katayama warned that the government is “ready to take decisive action” in currency markets if needed. Traders have heard it all before and shrugged it off.
AUDUSD is holding steady in a 0.7010-0.7034 range, still drawing support from recent hawkish remarks by RBA officials. Their inflation worries have kept a November rate hike firmly on the table. Across the Tasman, the RBNZ is expected to lift its policy rate to 3.00% from 2.75% tomorrow.
Today’s US calendar is packed, but none of it is likely to move FX markets much, if at all, with tomorrow’s Fed monetary policy decision looming. On the docket are September durable goods orders, the Conference Board’s consumer confidence index, new home sales and a handful of regional manufacturing surveys.
The Canadian calendar is empty.
