USD, CAD Higher, Mixed JPY, Weak CHF As Crude Rises

against other currencies through the European session as EUR/USD retreated to US$ 1.3162, USD/JPY gained to ¥100.08, GBP/USD fell to US$ 1.5590, and USD/CHF appreciated to CHF 0.9414. Traders continue to position themselves ahead of tomorrow’s US August NFP report with a +180,000 headline print expected. Many US data today include August Challenger job cuts, weekly initial and continuing jobless claims, July factory orders, and August ISM non-manufacturing. Dallas Fed’s Fisher is scheduled to speak and Minneapolis Fed’s Kocherlakota yesterday suggested rates are higher due to poor Fed communications and said QE has been “positive” for the economy. The G-20 summit has been convened in St. Petersburg and China is making headlines with a report that it may float the yuan in a Shanghai free trade zone.

The Canadian Dollar outperformed all major rivals through the European session as USD/CAD fell to C$ 1.0478, EUR/CAD backtracked to C$ 1.3808, CAD/JPY gained to ¥95.34, and GBP/CAD weakened to C$ 1.6359. Bank of Canada yesterday voted to keep its benchmark rate unchanged at 1.00%, as expected, and reiterated its next move on rates will be to raise them. Tomorrow’s Canadian numbers include August employment and labour market data with a 7.2% unemployment print expected followed by August Ivey PMI.

The Swiss franc was weaker against all major currencies through the European session as EUR/CHF climbed to CHF 1.2398, GBP/CHF rallied to CHF 1.4679, and CAD/CHF gained to CHF 0.8965. As uncertainty regarding possible US military action against Syria remains high, CHF has been pressured lower. Many Swiss data due tomorrow include August foreign reserves, August CPI, and Q2 industrial production. EUR/CHF continues to orbit the 50% level of its 2013 range.

The Japanese yen was mixed against major rivals through the European session as EUR/JPY fell to ¥131.16, GBP/JPY improved to ¥156.08, and AUD/JPY moved lower to ¥91.10. USD/JPY moved above ¥100 for the first time since 25 July. As expected, Bank of Japan kept monetary policy unchanged overnight with its 2014 monetary base target steady at ¥270 trillion. BoJ will continue to try and reach 2.0% inflation and is hoping the JPY will remain relatively weak as a byproduct to support Japan’s worsening foreign trade position. BoJ Governor Kuroda pledged monetary support if the likely increase in Japanese sales taxes dents economic growth. Japanese portfolio flows continue to indicate a significant reduction in foreign bond purchases.

The British pound turned in a mixed performance against other currencies through the European session as EUR/GBP fell to £0.8429 and GBP/AUD rallied to A$ 1.7073. Traders await BoE’s interest rate announcement today to see if its asset purchase program target remains steady at £375 billion. Forward guidance from Governor Carney and others suggests rates will remain steady until unemployment moves lower to 7.0%.

The Euro lacked clear direction against other major currencies through the European session as EUR/AUD gained to A$ 1.4415 and EUR/NZD improved to NZ$ 1.6736. The ECB is expected to keep its main overnight call rate unchanged at 0.50% today and the markets want to see more forward guidance from the Governing Council. Eurogroup’s Dijsselbloem said it is “realistic” to assume Greece will require new financial aid. ILO French Q2 unemployment ticked higher to 10.9% and German July factory orders are due today. German data expected tomorrow include July trade, Q2 labour costs, and July industrial production.

Gold and Silver weakened through the European session as Gold fell to US$ 1381.09 and was capped at $1394.97 while Silver depreciated to US$ 23.135 after finding resistance around US$ 23.650. The possibility of a limited US strike against Syria is keeping a lid on the metals complex. US lawmakers return to Congress on 9 September and it remains to be seen if any action against Syria is expected before then. Gold and Silver are down from recent highs of US$1433 and $25.10, respectively.

Crude Oil was stronger through the European session as Brent futures reached US$ 113.93 and were supported at $113.33 while WTI futures climbed to US$ 107.47 and were supported at $106.72. All eyes are on St. Petersburg where the G-20 summit is convening to see if the US and Russia offer any additional rhetoric ahead of expected US military action against Syria. The US Senate’s Foreign Relations Committee yesterday authorised a limited strike against Syrian chemical weapons facilities. US crude stockpiles data are due and it is expected that crude stockpiles were reduced by 2 million barrels last week. China’s futures regulator announced it will permit foreign investors to trade crude oil futures.