Canadian Dollar Marking Time Ahead of US CPI Report
The Canadian dollar traded flat on Monday as traders waited for US inflation data due out tomorrow. The USDCAD pair opened at 1.3933 and remained within a narrow range of 1.3928-1.3946 throughout the day, closing at 1.3946. The lack of market-moving economic data from either Canada or the US meant that there was little incentive to take fresh positions.
The Canadian dollar's upside remains constrained by the narrowing Canada-US interest rate differential and signs of renewed CAD demand as speculative short positions are unwound. Hopes for a reopening of the Strait of Hormuz have faded, leading to a surge in oil prices overnight, with WTI climbing 1.9% to 84.61 before retreating.
The rest of the market was also quiet on Monday, with Asian equities trading mixed and major indices like the S&P 500 futures and the DXY index showing little movement.