FX markets opened in Asia with a mildly positive tone. There weren’t any fresh disasters, missile tests or threats to distract traders.  Japan closed for a holiday.

The US dollar eked out gains against the Japanese yen, British pound and Canadian dollar but lost ground against Euro, Swiss franc, and the antipodean currencies.

USDJPY closed at 110.84 on Friday, opened at 111.00 in Asia and climbed to 111.41 buoyed by rising US Treasury yields. The Bank of Japan policy meeting is Thursday.

AUDUSD and NZDUSD popped higher in Asia on the improved risk tone.  Those gains didn’t last.  Prices retreated but remained a tad higher then where they were at Friday’s close.  AUDUSD traders are looking ahead to speeches from RBA officials later in the week.  NZDUSD traders are keeping an eye on the pending election.

EURUSD is consolidating ahead of Wednesday’s FOMC meeting.  Prices moved sideway’s in Asia, dropped in early European trading and then bounced after inflation data.Eurozone CPI was 1.5%, y/y, in August as expected.

Sterling traders were busy.  GBPUSD ticked higher in Asia, rising from 1.3555 and touched 1.3614 in early European trading.  Prices dropped down to 1.3532 by the New York open.  Traders are waiting for  Bank of England Governor Mark Carney’s speech at 1100 am EDT, to gauge his hawkishness.  Market’s appeared to ignore UK politics.  UK Foreign Secretary Boris Johnson and Prime Minister Theresa May appear at odds.

Oil prices rallied.  WTI reached $50.31/ barrel before retreating to $49.71.  Price support comes from last weeks reports by Opec and IEA that the oil market is starting to rebalance.

Gold prices slide on the prospect of higher US rates and the improved risk environment. Gold dropped from $1,319.51 to $1,312.71.

USDCAD traded choppily inside a narrow range.  Positives from  firm oil prices and a hawkish Bank of Canada were offset by concern ahead of the FOMC meeting

There isn’t any US or Canadian data of note due this morning.  Bank of Canada Deputy Governor Timothy Lane speaks in Saskatoon (2:15 pm EDT) on “How Canada’s International Trade Is Changing with the Times”

Bank of England Governor Mark Carney’s speech is at 11:00 am

USDCAD Technical outlook:

The intraday USDCAD technicals are mildly bullish while prices are trading above 1.2130 looking for a break of resistance at 1.2240 to extend gains to 1.2370.  A break below 1.2060 would lead to 1.1950.  For today, USDCAD support is at 1.2130 and 1.2080.  Resistance is at  1.2210 and 1.2240.

Today’s Range 1.2140-1.2240

Chart:  USDCAD hourly