August 30, 2021
USD/CAD: After reaching the local high of 1.2830 in the previous week, USD/CAD is consolidating its gains in the early Asian trading hours on Monday. The pair confides in a very close trading range with less than 10-pips movement. The movement in the greenback is provided by the Fed’s Chair Jerome Powel’s speech at the Jackson Hole Economic Symposium. He agreed to start reducing asset purchases this year, but he didn’t mention the timeline. The gains were limited by the mixed economic data, where US Personal Income and Spending rose in July and core PCE inflation eased for the second straight month. On the other hand, the Canadian dollar gained on higher crude oil prices. As for now, traders wait for the Canadian Current Account data, and US Pending Home Sales data to estimate the market sentiment.
AUD/USD: The Australian dollar started the week quietly, having fallen to 0.73 level after showing the most gaining bullish dynamic since early June the previous day. In doing so, the risk sentiment balances between optimism provided by Fed Chairman Jerome Powell and the covid, as well as geopolitical, challenges. Last Friday he supported global market sentiment despite signaling rate tapering this year. It should be noted, however, that the escalating tussles between the US and China, as well as the West and the Middle East challenge optimists and Australian dollars bulls. Also on the negative side were Australia’s highest daily covid cases, the latest around 1.330 infections.
WTI: Oil prices are going to be closely watched today due to Hurricane Ida that is still a Category 4 storm with maximum wind speed of 130 miles per hour, according to the National Hurricane Center. This makes oil volatility a priority event in energy markets today and Canadian dollar and Norwegian Krone crosses will be high up on market-maker’s agendas today. Meanwhile, US West Texas Intermediate oil spot ended Friday around 1.37% higher, growing from their lows to highs at $69 on the day. Moreover, oil prices showed their biggest weekly gains for the last year. During last week, Brent gained over 11% and WTI rose more than 10%, which was the biggest weekly percentage gains for both since June 2020. Brent futures rose for 2.3%, while WTI crude rose 2.0%. That was the highest close for Brent since August 2 and for WTI since Aug 12.