USD / CAD - Canadian dollar consolidating losses.
- FOMC expected to leave rates unchanged today.
- US jobless claims data released today due to US holiday tomorrow.
- US dollar opens steady as it consolidates yesterdays gains.
USDCAD: open 1.3665, overnight range 1.3652-1.3692, close 1.3679, WTI 72.62, Gold 3378.09
The Canadian is nursing its wounds after yesterday’s broad-based US dollar rally that kicked off when Trump threatened Iran and even hinted at a regime trade. Fears of US military action in Iran sparked a spike in safe-haven demand for dollars. The Bank of Canada’s summary of deliberations from the June 4 meeting reiterated policymakers concerns about the economic impact of tariffs.
WTI oil traded in a 72.17-74.03 band, opening near the low as fears of an American strike on Iranian nuclear facilities failed to materialize. The American Petroleum Institute reported a sharp 10.133-million-barrel draw in crude inventories last week.
FOMC policymakers are expected to leave rates unchanged while updating their economic projections. They will likely factor in the possibility of U.S. involvement in the Iran-Israel conflict and assess the inflationary impact of Trump’s tariff threats.
The G-7 summit wrapped up on a disjointed note. Trump accepted glowing praise from other leaders, then skipped most meetings. The group failed to release a joint communiqué, effectively turning the event into G-6 plus Trump.
Global equity markets were subdued overnight ahead of today’s Fed decision. Australia’s ASX 200 slipped 0.12%, Japan’s Topix rose 0.77%, and Hong Kong’s Hang Seng lost 1.12%.
European markets hovered near flat. The UK’s FTSE 100 edged up 0.22%, while Germany’s DAX and France’s CAC 40 were unchanged. S&P 500 futures gained 0.22%, and the U.S. 10-year Treasury yield dipped to 4.38%. Gold (XAUUSD) ranged between 3370.79 and 3399.99.
EURUSD consolidated Tuesday’s losses in a 1.1475-1.1524 range overnight. The euro ignored upbeat ZEW data, while Eurozone inflation met expectations and had no effect on FX. Traders are weighing the inflationary risks of higher oil prices and the potential for delayed ECB rate cuts.
GBPUSD remained defensive after falling yesterday. It opened at 1.3464 and traded between 1.3422-1.3476 overnight. Both the Fed and Bank of England meet this week, keeping traders cautious. UK inflation matched forecasts.
USDJPY moved in a 144.80-145.44 range overnight. Yesterday’s demand for yen on geopolitical tension faded as oil prices climbed, a negative for Japan. The pair found support from weak export data — the first decline in eight months — blamed on Trump-era tariffs.
AUDUSD traded in a 0.6468-0.6514 range overnight, pressured by broad U.S. dollar strength amid global tensions. NZDUSD followed suit, moving within a 0.6010-0.6040 band.
With U.S. markets closed tomorrow for Juneteenth, weekly jobless claims data is released today (forecast 245,000 vs. 248,000 last week). Building Permits and Housing Starts are also scheduled.
