The Canadian dollar recovered temporarily from some recent losses, as U.S. ISM services figures missed the mark, cementing the view that the Federal Reserve would cut interest rates. USD/CAD opened about 1.3769 and traded in a different range before ending up around 1.3774, indicating a wary mood in the market. Investor attention is on the mounting U.S.-Canada trade tension as it awaits another bite at 35 percent tariffs on some exports outside USMCA regulations.
CAD bullish sentiment, crude oil, recouped and was trading between US$65.12 and US$66.34 per barrel, boosted by the hope that the diplomatic efforts between the U.S. and Russia could lead to sanctions being lifted. Nonetheless, the new U.S. tariff threats could still toe-hold oil prices even as there were worries of supply.
Statistics in the Canadian lumber industry demonstrate that Prime Minister Mark Carney has promised the industry $1.2 billion in relief. However, the uncertainty of the larger trade is still raising concerns among investors. The cloud that has hovered over Canada’s U.S. trade negotiations has exposed some critical export industries to possible tariffs starting as early as tomorrow.
Asian equity markets performed differently, with Japan’s Nikkei increasing by about 1 percent, Australia’s ASX rising by a percentage point, Hong Kong’s Shanghai Composite increasing by a percentage point, and the Hang Seng also rising. European indices were trading sideways, with the market being slightly flat in the early morning trade. U.S. stock futures rose somewhat, and the 10-year Treasury yield was just over 4.23%.
Under the existing risk environment, currency pairs are performing differently. EUR/USD ranged between 1.1528 and 1.1607, with the Fed rate cut chatter and upbeat retail sales in the eurozone, counterbalancing dismal German factory orders. GBP/USD meantime traded in the range of 1.328213314, dismissing poor UK data and fiscal worries. USD/JPY traded between 147.31 and 147.89 as the declining Treasury yields pressured the yen.
This USD/CAD movement highlights the fact that forex markets are sensitive to macroeconomic indicators, trade shocks, and energy price fluctuations. To stay on the curve, the traders are urged to watch the ISM service data, upcoming trade deadlines, and the changing geopolitical tensions.
Read More News
