Aug 29, 2025 (Baystreet.ca via COMTEX) --
- US PCE data and Canada Q2 GDP in focus
- US and Canada holiday on Monday mean quiet markets this afternoon
- US dollar under pressure due to falling Treasury yields.
USDCAD open 1.3756, overnight range 1.3737-1.3758, close 1.3749, WTI 64.22, Gold 3407.05
The Canadian dollar added to this weeks gains overnight before the rally stalled with traders content to await today's Canada GDP and US PCE Prices data.
The Canadian dollar gains occurred against the backdrop of broad US dollar weakness. The selloff was spurred by dovish remarks by Fed Governor Christopher Waller. He said he would support a 25 bp rate cut in September than added he expected additional cuts for the rest of the year.
Canada's Q2 GDP release is due, with expectations for a 0.6% y/y contraction, while June GDP is forecast at +0.1% m/m. The breakdown, not the headline, will matter most, and the risks lean negative for the Loonie.
US PCE Price index is less relevant today, then previously after Powell shifted his emphasis to jobs in his Jackson Hole speech. He downplayed the inflationary shock from tariffs as more of a one-off jump than a persistent trend and instead leaned into the labor market narrative. With recent BLS revisions showing steeper job losses, the Fed Chair framed employment as the bigger concern.
Asian equities were mixed overnight. Japan's Topix slipped 0.47%, Australia's ASX200 was flat, and Hong Kong's Hang Seng edged up 0.32%. As of 7:30 am EDT, European bourses are under pressure, with the CAC-40 and DAX both down 0.37%, while the FTSE 100 has lost 0.23% and the S&P 500 is down 31%. The US 10-year yield is sitting at 4.22%.
EURUSD traded in a 1.1656-1.1691 band, slipping from the top after softer-than-expected inflation reports across the bloc and weaker German retail sales, which fell to 1.9% y/y from 4.9%. The releases did nothing to sway expectations for the ECB to hold rates steady in September.
GBPUSD moved lower in a 1.3514-1.3461 range, retreating despite upbeat sentiment in a Lloyds Bank survey that showed business confidence at its strongest since 2014. The drop was largely driven by profit-taking after this week's gains, with traders stepping aside ahead of the US PCE release.
USDJPY swung between 146.77 and 147.20, last seen at 147.09 in New York. Mixed domestic data left traders without clear direction: industrial production fell -1.6% m/m, retail sales eked out a 0.3% rise, unemployment dipped to 2.3% from 2.5%, and Tokyo inflation eased to 3.0% from 3.1%.
AUDUSD ranged between 0.6527 and 0.6543 overnight, supported by dovish Fed commentary while hotter Australian CPI earlier this week trimmed near-term expectations for RBA easing.
Have a great long weekend.
COMTEX_468384662/2559/2025-08-29T11:57:34
