It is “Rebate Monday”.  The US dollar is refunding a little of Friday’s gains in early New York trading.  The Asia session was quiet and the European session just a tad nosier. Typhoon Mangkhut and a holiday in Japan accounted for the Asia lethargy.

The European action was centered around Eurozone Inflation data and remarks by ECB Board member Benoit Coeure.  August CPI rose 2.0%, y/y and Core- CPI rose 1.0%, as expected.  Mr Coeur said the ECB should not publish a rate path but should stick with the current guidance.  EURUSD is trading at 1.1647, near the top of its 1.1616-59 range.

GBPUSD drifted higher rising from 1.3072 in Asia to 1.3102 as New York opened.  There was a lot of negative Brexit news on the weekend.  UK Prime Minister Theresa May claimed that if parliament didn’t vote for her plan, there wouldn’t be a deal.  GBPUSD remained firm suggesting a bit of short-covering is occurring.

The broad US dollar weakness lifted the commodity bloc currencies.  AUDUSD traders are looking ahead to the release of the RBA minutes tomorrow.

USDCAD is consolidating last week’s gains.  Supportive domestic data and expectations for another Bank of Canada rate increase in October undermine USDCAD while USD/CAD trade concerns limit the downside.  Canada Retail Sales and CPI are due Friday.

The US is expected to announce up to $200 billion worth of tariffs against China “sometime this week”, which sounds a lot like last week’s prediction.  China has reportedly said they would skip the next round of trade talks if the US follows through.  China is supposed to be considering methods to disrupt the US supply chain including, limiting exports of parts and equipment.  That rhetoric contributed to a drop in Asia and European equity indices and drove US equity futures into the red. There aren’t  any US or Canadian economic reports due today.

USDCAD Technical Outlook

The intraday USDCAD technicals are bearish below 1.3040, targeting 1.2980. Longer term, the uptrend from April is intact above 1.3050 while the downtrend from 1.3380 in July comes into play at 1.3210.  For today, support is at 1.3020 and 1.2980.  Resistance is at 1.3040 and 1.3080.

Today’s Range 1.3010-1.3060