Yesterday, USDCAD initially climbed from 1.3200 up to 1.3244 – near a 4 day. Since the release of the Fed minutes at 11:00am Wednesday, the USD has been broadly bid across the board. Equity and commodity markets were under pressure in Asia and London before recovering in North America. USDCAD abruptly moved lower to 1.3166 before finishing the day near 1.3180/85. Risk off flows resumed overnight as some Eurozone data missed estimates and Brexit uncertainties resurfaced. European equity markets dropped towards 2 week lows along with oil prices. The USD broadly gained sending the USDCAD back towards weekly highs. Similar to yesterday, North American equities are pushing higher erasing overnight losses. After hitting session highs at 1.3234 this morning, USDCAD has fallen toNA session lows near 1.3190.
Stocks extended gains after closing at a record for the first time since the pandemic started amid a rebound in giant technology companies. Treasuries advanced. The S&P 500 rose as investors assessed earnings from retailers and the latest on stimulus talks ahead of the Federal Reserve's meeting minutes. A buying stampede drove American stocks up more than 50% from this year's lows, with the S&P 500 completing its fastest-ever return to a record after a drop of at least 20%. High-frequency economic indicators and corporate earnings have improved, bolstering optimism on the recovery from a pandemic-induced recession amid ultra-easy monetary policy and massive stimulus. Democratic and Republican leaders are hinting that they are looking for a path toward reviving stalled negotiations on the next round of pandemic relief for the U.S. economy, even as both sides remain far from any deal. The Trump administration sees a possibility for both parties to agree on a smaller round of pandemic relief totaling $500 billion that would omit the biggest areas of disagreement. Boosted by the S&P 500's surge to a record on Tuesday, the market cap of global equities is at an all-time high of $89.7 trillion. Risk assets have rallied since March as unprecedented stimulus measures and gains in technology stocks have outweighed concerns about U.S.-China trade tensions and rising coronavirus cases.
U.S. home construction starts increased in July by more than forecast and applications to build surged by the most in three decades, indicating builders are responding to robust housing demand fueled by record-low interest rates.
Residential starts jumped by 22.6%, the most since October 2016, to a 1.5 million annualized rate from a month earlier, according to a government report released Tuesday. That compared with the median forecast in a Bloomberg survey of 1.25 million and followed an upwardly revised 1.22 million in June.
Yesterday, the CAD was the best performing currency as USDCAD dipped from 1.3258 down to 1.3192 (lowest since Feb. 21) before climbing to 1.3240. Today, the CAD is the worst performing currency. USDCAD initially dropped from 1.3235 down to 1.3206 overnight before climbing to 1.3254. Better than expected Canadian manufacturing data along with weaker U.S. retail sales data resulted in a move back to 1.3230. This was short-lived and USDCAD has since pushed higher to 1.3271. Overall, current rates offer a prime buying opportunity according to the Bank of Montreal which has the fair-value pegged closer to 1.3400.
The number of Americans applying for unemployment benefits fell below 1 million for the first time since the pandemic began in March, suggesting the economic recovery is gaining some traction amid a deceleration in coronavirus infections.
Initial jobless claims in regular state programs fell by 228,000 to 963,000 in the week ended Aug. 8, Labor Department data showed Thursday. Continuing claims -- the total number of Americans claiming ongoing benefits in state programs -- decreased to 15.5 million in the week ended Aug. 1, the lowest since early April.
The USD/CAD pair continued to push lower in the early American session and touched its lowest level in nearly a week at 1.3257. As of writing, the pair was down 0.55% on the day at 1.3238. A renewed selling pressure on the greenback allowed USD/CAD to extends its slide. The data published by the US Bureau of Labor Statistics showed on Wednesday that the core Consumer Price Index (CPI) rose from 1.2% to 1.6% in the US and surpassed analysts' estimate of 1.1%. Furthermore, other data revealed that real average hourly earnings declined by 0.4% on a monthly basis in July. Meanwhile, US Treasury Secretary Mnuchin reaffirmed that President Donald Trump would like to go ahead with a capital gain tax cut. This comment seemingly provided a boost to market sentiment and caused the USD to lose interest. At the moment, US Dollar Index lost is down 0.28% on the day at 93.38. On the other hand, although the OPEC in its monthly report said that it was expecting the global oil demand to decline by 9.06 million in 2020, crude oil preserved its bullish momentum. With the barrel of West Texas Intermediate (WTI) gaining nearly 2% on the day at $42.40, the commodity-sensitive loonie gathered further strength against its rivals. Later in the session, the US Energy Information Administration's weekly Crude Oil Stocks Change data will be watched closely by the market participants.
U.S. stock advanced after President Donald Trump said he's considering a tax cut on capital gains and American hospitalizations for Covid-19 fell to their lowest in a month.
A broad rally from industrial goods to health-care shares set the Stoxx Europe 600 Index headed for its best increase in a week.
Treasuries and European bonds extended their declines. The dollar turned lower against its major peers including the euro, after a German gauge of investor confidence unexpectedly surged. Gold fell for a third day.
Technology shares led U.S. stocks lower after the benchmark S&P 500 approached an all-time high reached before the coronavirus pandemic. Crude oil gained and the dollar strengthened. The tech heavy Nasdaq Composite Index slumped for a second day. The S&P 500 Total Return Index, which includes reinvested dividends, rose earlier to an all-time high, exceeding its February peak. The price-only version rose to less than 1% away from breaking out before turning red. In Europe, stocks advanced led by financial companies. Chinese equities climbed on the back of data showing the economy continuing to recover from the pandemic, with consumer inflation accelerating. On Saturday, President Donald Trump signed four executive orders to maintain some assistance, including for unemployment benefits, a temporary payroll tax deferral, eviction protection and student-loan relief. Trump's policy announcements come as Democrats and Republicans are still negotiating a broader additional virus relief package. The two sides are still trillions of dollars apart on overall spending and on key issues, including aid to state and local governments and the amount of supplementary unemployment benefits. European stocks briefly dipped on Monday after China retaliated against the U.S. by sanctioning 11 Americans. The list includes Senators Marco Rubio and Ted Cruz, but no members of the Trump administration. Still, it's another sign of discord between the two nations as the Trump administration takes a harder line against China in the run-up to the November election
Yesterday, USDCAD dipped to 1.3244 – just shy of Wednesday's low of 1.3234 (lowest since Feb. 21) before climbing to 1.3323. After equity markets rallied to new highs, USDCAD dropped back to 1.3275 before climbing back to 1.3320 in late trade as Trump announced a 10% tariff on Canadian aluminum imports into the United States. The CAD continued to weaken overnight as Canada threatened $ for $ countermeasures sending USDCAD back up through the broken support zone (1.3320-1.3330) to a high of 1.3372. Both Canadian and U.S. job numbers beat estimates while North American equity markets recouped overnight losses. The S&P 500 and NASDAQ are holding near all-time highs. USDCAD dipped to 1.3325 but has since turned higher on broad-based USD strength. U.S. yields are higher as well while the Dollar index has climbed from 27 month lows (92.50) towards a 4 day high (93.62). The USDCAD rally higher stalled just shy of 1.3400 before easing back to 1.3375. The market now awaits any news on the Covid stimulus front as the U.S. has yet to finalize a new deal to replace the support that expired at the end of July
U.S. applications for unemployment benefits fell more than expected last week to the lowest since the pandemic started, in a broad decline across nearly all states, suggesting the labor market is improving.
Initial jobless claims in regular state programs fell by 249,000 to 1.19 million in the week ended Aug. 1, Labor Department data showed Thursday. The median forecast in a Bloomberg survey of economists called for 1.4 million. Stocks erased earlier declines after the figures.
U.S. equities declined with stocks in Europe after a string of poor earnings illustrated the continuing hit from the pandemic.
American International Group Inc. fell in the U.S. pre-market after posting a $7.9 billion loss after Monday's close. Diageo Plc tumbled in London when the drinks giant provided no 2021 guidance. Bayer AG dropped after downgrading its sales outlook. Bonds climbed and the dollar turned higher against its biggest peers.
Yesterday, USDCAD climbed from near 5 month lows @ 1.3334 to a 1 week high @ 1.3460 despite broad-based USD weakness. The USD index has fallen from near 3 year highs back in March (103) to 27 month lows this week (92.55). Equity and oil markets were under pressure much of the day with the DJIA down nearly 500 pts and WTI crude down nearly 6% at one point before rebounding. USDCAD did fall back to 1.3415 before moving back to hold near 1.3430. Overnight, the USD was initially under pressure during the Asian session before recovering. USDCAD continues to hold just above the 1.3400 level as equity and oil prices are under some pressure once again.
U.S. stocks climbed on speculation the Federal Reserve will signal continued economic stimulus and as traders sifted through a batch of corporate earnings. Bonds rise and the dollar fell. The S&P extended its July rally and was on track for a fourth consecutive monthly gain. As earnings season rolls in, traders will be looking for corporate outlooks to gauge a potential rebound from the coronavirus-induced recession. The Federal Open Market Committee is all but certain to keep its benchmark rate unchanged and reinforce the message that it will do whatever it can to support the recovery. The Fed will release a statement at 11am, and Chairman Jerome Powell will hold a press conference 30 minutes later. Quarterly forecasts are not due to be updated at this meeting.
Stocks fell Tuesday morning, with stimulus talks in Washington, updates on the Covid-19 vaccine front and corporate earnings results front and center.
After market close Monday, Senate Republicans led by Majority Leader Mitch McConnell announced the HEALS Act, or proposal for a new stimulus bill to help individuals impacted by the economic fallout from the coronavirus pandemic.
The Health, Economic Assistance, Liability Protection, and Schools Act includes a second stimulus check worth up to $1,200 for the same group of Americans as the last round. Also, it will extend enhanced unemployment assistance at a lowered rate of $200 per week, down from $600 per week previously, until states could deliver a replacement worth about 70% of lost wages.
Oil erased gains to trade near $44 a barrel in London as concerns persisted over dwindling demand and growing supplies. Stocks have opened lower in North America as well.
Brent futures dropped as much as 1.2% as China's cooling oil consumption hurt prices for Iraqi crude, while derivatives that help value North Sea grades showed renewed weakness. In the U.S., crude stockpiles expanded unexpectedly, and jobless claims rose for the first time since March.
Oil jumped earlier this week after European Union leaders agreed on a massive stimulus package, but prices have struggled to break out of a tight range this month. While the race for a coronavirus vaccine intensifies, rising infections across major economies and the imminent easing of OPEC+ output cuts is keeping a lid on further price gains amid a patchy recovery in consumption.
U.S. stocks fluctuated as investors weighed the likelihood for a new spending bill, corporate earnings an escalation of tensions with China that could spill over into trade. The dollar weakened. The S&P 500 pared earlier gains, led by declines in the energy, commercial services and consumer discretionary sectors. Futures retreated overnight on news that the U.S. ordered China's Houston consulate to quickly close. Progress on combating the virus's impact also contributed to sentiment. The U.S. reported more than 1,000 deaths Tuesday. Pfizer Inc shares rallied after saying the government ordered up to 600 million doses of its vaccine candidate against Covid-19. Treasuries rose, while Silver continued its tear, climbing to the highest level in almost seven years. Fresh Sino-U.S. tension including new charges of Chinese hacking are adding to potential risks weighing on investors who recently drove global equities to a five-month high. After the success of a European rescue package this week, Senate Republicans and the Trump administration are struggling to reach consensus on another stimulus plan. The president warned the coronavirus crisis will probably worsen before improving. Elsewhere, oil in New York dropped from a four-month high on signs of a surprise gain in U.S. crude stockpiles.
Stocks rose Tuesday morning, following global equities higher after European Union leaders agreed to a breakthrough fiscal stimulus deal to help support the virus-stricken region. The Nasdaq Composite hit a record high, with tech shares rallying again.
After nearly five days of discussions, the 27 governments comprising the EU agreed to create a 750 billion euro, or $858 billion, recovery fund built through joint borrowing. The agreement will see about half of these funds distributed as grants to the EU states most devastated by the pandemic, while the rest will comprise low-interest loans.
The greenback remained on the defensive against its Canadian counterpart and pushed the USD/CAD pair to fresh daily lows, around mid-1.3500s in the last hour. The pair failed to capitalize on its early uptick to three-day tops, rather faced rejection near the 1.3600 mark amid the emergence of some fresh selling around the US dollar. The ever-increasing number of coronavirus cases in the US dampened prospects for a swift recovery for the domestic economy and kept exerting some pressure on the USD. The greenback was also pressured by a fresh leg down in the US Treasury bond yields, down around 3% for the day. This coupled with a slight recovery in the global risk sentiment – as depicted by a goodish bounce in the equity markets amid optimism over a potential COVID-19 vaccine – further dented the USD's relative safe-haven status. Meanwhile, a weaker tone surrounding crude oil prices, which tends to undermine the commodity-linked currency – the loonie, did little to impress bulls, albeit might help limit deeper losses. Hence, it will be prudent to wait for some strong follow-through selling before traders start positioning for a further near-term depreciating move.
Yesterday, USDCAD retraced the bulk of Wednesday's move lower (1.36 down to 1.35). Unable to break below the 1.35 mark, USDCAD rallied to 1.3545. After a brief correction down to 1.3511, the pairing climbed to hold near 1.3570-80 for the balance of the session. Wednesday saw the USD index test (and hold) the June lows before trending back higher. USDCAD has held a lackluster 1.3565 – 1.3589 range so far today. Trading ranges have been minimal within currency, commodity, and equity markets on the day thus far. The exception has been the Euro leading the pack and trading near 4 month highs vs the CAD and USD again. The EURO had fallen 1.5 cents from Wednesday's 1.5545 high but has recovered that loss today with a move to 1.5531.
Stocks opened lower on Thursday, as investors digested a deluge of earnings results and new economic data on the state of the consumer and labor market as the pandemic continues.
The ongoing economic impact of the coronavirus pandemic will be captured in two key reports Thursday morning. The Labor Department's weekly jobless claims revealed that another 1.3 million workers filed unemployment claims, slightly above consensus forecasts. However, retail sales skyrocketed by 7.5% last month — well above market expectations of 5% and on the heels of a record 17.7% seen in May.