CAD Drifts Lower, BoC Meeting Eyed

CAD Drifts Lower, BoC Meeting Eyed


The Canadian dollar weakened against other counterparts as investors await the Bank of Canada monetary policy meeting. The market is expecting the bank to remain on hold after tapering asset purchases in the April meeting. However, investors will listen to the bank's comments on the labor market, following two disappointing job reports since the last meeting. Covid19 forced strict lockdowns lately, but the authorities are considering lifting them off as the numbers are decreasing again. The USDCAD rose to 1.2116, the GBPCAD rallied to 1.7164, and the EURUSD rose to 1.4757, the highest in a week.


The dollar index which measures the greenback against a basket of major currencies continued to trade in a tight range near the 90 level as investors await the US inflation gauges. The US May Consumer Price Index will be reported tomorrow, if the numbers surprise to the upside, they could build some pressure on the Federal Reserve to act. However, if we compare to China, the May CPI figures missed estimates. The USDJPY held steady near 109.50, the EURUSD traded near $1.2180, and the GBPUSD remained stuck in a tight range near $1.4160.


Major US stock index futures settled almost unchanged as investors brace themselves to the inflation gauges tomorrow. The inflation numbers will impact the chances of monetary policy alterations, that's why this release is very important to watch. On the other hand, the US Senates approved a bill to help the US competing with China in the tech sector, as the winner of this battle will be the top economy. The Dow Jones Industrial Average futures traded near 34600, the S&P 500 futures were almost unchanged near 4225, and Nasdaq futures hovered above 13800.


Precious metals prices had a roller-coaster session as US yields fluctuated significantly. The US 10-year yields fell to a one-month low of 1.513% but later recovered to 1.543%, leading to a sharp move in the market. The price of a gold ounce rose to $1903 before falling again to $1884, and fluctuating now near $1890. The price of a silver ounce is holding near $27.60, while palladium eased to $2795. US inflation figures release will be a live event of bullion traders.


Oil prices extended their gains amid optimism over the global economic recovery. The American Petroleum Institute reported a decline of 2.108 million barrels in US oil stock. The US Energy Information Administration will report the official figures later today. The West Texas Intermediate crude July contract rose to $70.61, and the Brent blend August contract rallied to $72.80.

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