Canadian Dollar Update – Canadian dollar trading with negative bias

USD/CAD Open: 1.3696-00, Overnight Range: 1.3693-1.3725, Previous Close: 1.3709

WTI Oil open at $88.25 and gold open at $1,821.58. US markets are higher today.

For today, USD resistance is at 1.3765. Support is at 1.3720.

The Canadian dollar remains under pressure due to external forces. Political dysfunction in America and a very hawkish US interest rate outlook have soured global risk sentiment and caused a spike in Treasury yields.

Canadian dollar support from the steady rise in oil prices from the July rally has faded, as current West Texas Intermediate levels are fully reflected in the price. Todays OPEC general meeting is not expected to bring any surprises. The cartel is widely expected to leave policy and its oil outlook unchanged. Saudi Arabia and Russia already announced that they would extend their voluntary production cuts until the end of December.

US political dysfunction was front and center overnight. Republican senators voted to dump Speaker Kevin McCarthy because he agreed to Democrat measures to avoid shutting down the government. Kicking him to the curb leaves the Senate Republicans without a leader, which greatly raises the odds for a government shutdown in the middle of November.

Bond traders thought so. The US 10-year yield surged to 4.884% in Asia before dropping to 4.764% in NY.

EURUSD traded with a bid in a 1.0452-1.05171 range. Eurozone PPI was -11.5% (August -7.6% y/y), and Retail trade fell 1.2% m/m (July -0.1%). ECB President Christine Lagarde repeated that EU rates would remain elevated for longer than previously expected.

GBPUSD climbed from 1.2037 to 1.2141, with prices getting a boost from a better than expected Services PMI reading (actual 49.3 in September, previous flash reading 47.2) flash estimate.

USDJPY plunged from 147.90 to 148.74 in a reaction to suspected Bank of Japan intervention, although Finance Minister Shunichi Suzuki refused to comment on the action.

AUDUSD traded with a mild bid in a 0.6287-0.6357 range. Services PMI rose to 51.8 in September from (August 47.8).

NZDUSD dropped from 0.5922 to 0.5871 after the RBNZ left interest rates unchanged at 5.50%.

Todays US data includes ADP employment and ISM Services PMI data.