USDCAD open: 1.3891 overnight range 1.3881-1.3912, close 1.3905
USDCAD has given up its European bid as it continues to drift down from its overnight peak. Fed Chair Kevin Warsh delivered what was a deemed a “hawkish” speech at Jackson Hole after he committed to the Fed’s 2.0% PCE inflation target. Why that is a surprise, is anyone’s guess, considering that a 2% inflation target is half of the Fed’s mandate. Nevertheless, the FedWatch odds for a 25bps rate hike on September 16, flipped from 36% against to 62.9% for this morning.
Trump took aim at Canada’s auto sector in a couple of tweets this weekend, reiterating that “I don’t want Canadian cars, I don’t want Canadian parts, I don’t want Canadian anything. They’ve been ripping us off for decades, and it’s going to stop.
And speaking of rip-offs… Trump announced that the US and Venezuela had reached an agreement to take control of 68 billion barrels of Venezuelan oil. That’s no different than a mugger who sticks a gun in your face then announces he is taking control of your wallet. American’s have really short memories. When Sadam Hussein decided he would control Kuwait’s oil, President Geroge Bush denounced the action as “naked aggression.” Well, guess who has their pants down today?
WTI rose from a $82.32 on Friday to $86.78 in NY today after the US and Iran starting flinging missiles and drones. The Americans attacked Kharg Island while Iran said they fired missiles and drones against two US bases in Jordan.
The US and Canadian economic calendars are empty
USDCAD Technicals
The USDCAD technicals are bullish while trading above 1.3840 and looking for a decisive break above the 1.3910-20 area to extend gains to 1.3980
Longer term, USDCAD is bearish below 1.3970, a level guarded by resistance in the 1.3900-20 zone and the 100-day moving average at 1.3916. That resistance band has capped every recovery attempt since the July high near 1.4245, and until it gives way the broader corrective move stays intact, with scope to revisit the 61.8 percent retracement near 1.3770 and, in a deeper setback, the 1.3480 low.
For today, USDCAD support is at 1.3840 and 1.3820. Resistance is at 1.3910 and 1.3940,
Today’s range is 1.3840-1.3920.
FX Heat Map
FX open high low 6:00 am
Scott Bessent in the Spotlight
Treasury Secretary gets to preside over the G-20 Finance Ministers meeting is in Asheville, North Carolina and he is aping his boss. Bessent decided that journalists from the Wall Street Journal and Bloomberg would not be allowed to attend. Both outlets have been critical of his Tariff D-day and bond-buy-back initiative. Bessent will use his time at the podium to cajole the Group of 20 to follow the lead of America while blaming China and Biden for all of the US woes.
Asian markets closed mixed. Japan’s Topix gained 0.23% and finished the month up 3.85%. Australia’s ASX 200 lost 0.18% but finished with a 1.67% gain while the Hang Seng was flat and down 1.01% for the month.
As of 7:00 AM, the UK FTSE 100 is up 0.29%, the German DAX is down 0.76% and the French CAC-40 is unchanged. S&P 500 futures are down 0.16%, the US 10-year yield is 4.724%, the DXY is 99.54 and gold is $4,453.32.
EURUSD | Range 1.1578-1.1606
EURUSD dropped Friday following the shift in Fed rate hike expectations for September 16, thanks to Fed Chair Warsh’s Jackson Hole speech. Comments by other Fed officials appeared to support a tightening bias. Furthermore, renewed Iran and US hostilities and the corresponding rise in crude prices weighed on the currency. The short-term EURUSD technicals are bullish above 1.1550.
GBPUSD | Range 1.3529-1.3556
Sterling traded with a bearish bias in holiday-thinned trade as UK markets were closed for the Summer Bank Holiday. GBPUSD is suffering from renewed US rate hike fears, downgraded Bank of England rate increases and ongoing US and Iran drama.
USDJPY | Range 159.48-160.20
USDJPY rallied in Asia following Warsh’s Jackson Hole speech and hit 160.20 in Asia before fears of BoJ intervention knocked prices down to the low in early NY trading. The 10-year JGB yield hit 2.93% which helped stem the rally as it raised expectations for a faster pace of BoJ rate hikes.
AUDUSD | Range 0.7153-0.7171
AUDUSD consolidated Friday’s losses and is trading with a bearish bias. More than a few AUDUSD forecasters are suggesting that the recent rally is overdone and that the RBA may not be raising rates in the near term, especially if the Iran/US war continues to weigh on commodity demand.
USDMXN | Range 17.0005-17.0432
USDMXN rallied Friday following the surge in Fed rate hike odds for September 16. The Warsh comments overshadowed a bearish outlook after Banxico raised its 2026 growth projection to 1.5% from 1.1% and indicated that it would keep rates unchanged for longer than expected.
CHINA
- PBoC Fix: 6.7828 vs exp. 6.7344 (prev. 6.7811)
- Shanghai Shenzhen CSI 300 rose 0.35% to 4,625.09
President Xi Jinping is attending the Shanghai Cooperation Organisation (SCO) meeting in Kyrgyzstan. The 10-member group includes Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, Belarus, India, Pakistan and Iran.
Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics, Tradingview
