Escalating geopolitical tensions weigh on commodities on Monday. US Dollar Index clings to small features above 97.50. Coming up: Speeches by FOMC members and BoC Governor Poloz.
The USD/CAD pair rose sharply within the early Asian session on Monday as markets reacted to President Trump’s remarks over the weekend on the commerce battle with China. After advancing to a recent 10-day excessive of 1.3494, the pair has gone right into a consolidation section and was final seen buying and selling at 1.3477, zero.41% above final week’s closing degree.
Touching on the commerce talks with China in a Twitter thread, Trump mentioned that tariffs on Chinese items had been set to extend to 25% from 10% on Friday and added that he would not let China renegotiate the deal. Commenting on Trump’s feedback, “We assume Trump could also be emboldened by the energy of the US financial system and agency US equities. As such the threats may quantity to a negotiating ploy,” TD Securities mentioned. “The immediate reaction has been for China’s delegation to reportedly delay or cancel its trip to Washington.”
Resurfacing considerations over a long-lasting commerce warfare reminded buyers of its potential affect on the crude oil demand outlook and weighed on the commodity. Following Friday’s modest restoration, the barrel of West Texas Intermediate turned south and dropped to its lowest degree since early April at $60.02, hurting the demand for the commodity-sensitive loonie.
On the opposite hand, the buck appears to be making the most of the risk-averse ambiance on Monday with the US Dollar Index posting small features close to 97.60.
Later within the day, FOMC members Harker and Williams in addition to Bank of Canada Governor can be delivering speeches. There will not be any macroeconomic information releases neither from the U.S. nor Canada.
Technical ranges to contemplate