Bank of England Governor Mark Carney didn’t say anything that would dissuade traders from expecting the BoE to raise rates by 0.25 bps in August.  He didn’t say they would, but said: “were the economy to develop broadly in line with the May Inflation Report projections – with demand growth exceeding the 1½% estimated rate of supply growth leading to a small margin of excess demand emerging by early 2020 and domestic inflationary pressures continuing to build gradually to rates consistent with the 2% target – an ongoing tightening of monetary policy over the next few years would be appropriate to return inflation sustainably to its target at a conventional horizon.  That was all that was needed to lift GBPUSD from 1.3220 to 1.3266.

EURUSD traded sideways in a 1.1649-1.1665 range in Asia.  Prices spiked higher, touching 1.1710 after better-than-expected Germany Factory Orders and Industrial Output data. That dovetailed nicely with yesterday’s upward revisions to Eurozone Services PMI.  EURUSD is in a minor intraday uptrend while prices are above 1.1650.  Resistance is in the 1.1710-20 area and at 1.1750.

USDJPY inched higher in Europe, rising from an overnight low of 110.29 to 110.69 on the improved risk tone and a tiny rise in US Treasury yields.

NZDUSD rallied in line with the broad US dollar selling in Europe while AUDUSD opened in New York, unchanged from yesterdays close.

President Trump is sort of blaming Opec for high oil prices.  Yesterday he tweeted: “The OPEC Monopoly must remember that gas prices are up & they are doing little to help. If anything, they are driving prices higher as the United States defends many of their members for very little $’s. This must be a two-way street. REDUCE PRICING NOW!”

It may have slipped his mind, but the spike in prices is a direct result of his decision to unilaterally declare the“ Joint Comprehensive Plan of Action” (Iran Nuclear Deal) void.

WTI oil prices have risen from $63.50 to $75.20/barrel since May.

The Canadian dollar has been bouncing inside a 1.3110-1.3220 range this week.  A Bank of Canada (BoC) rate hike of 25 bps next week is fully priced in.  Traders are content to take direction form broad US dollar moves.

FX markets are a tad nervous.  They are reluctant to react to the economic news while the threat of a full-blown US/China trade war looms.  Friday is the day US tariffs on Chinese imports take effect, and China’s response is critical.  Trump has threatened to put tariffs on another $200 billion worth of Chinese imports if China retaliates with tariffs of their own.

Today’s US economic reports include ISM nonmanufacturing PMI, Initial Jobless Claims and ADP jobs.  The FOMC minutes from the June 13 meeting are released this afternoon.  They should be a non-event.  Traders are looking ahead to Friday’s Canadian and US employment reports.

USDCAD Technical Outlook

The USDCAD uptrend line from May 22 remains intact while prices are above the 1.3110-20 area.  A break above 1.3170 suggests further gains to 1.3270.  A move below 1.3110 targets 1.3050 and then 1.2950.  For today, USDCAD support is at 1.3120 and 1.3090.  Resistance is at 1.3170 and 1.3210.

Today’s Range 1.3120-1.3190