Aug 21, 2025 (Baystreet.ca via COMTEX) --
- FOMC minutes sound hawkish but little impact.
- US jobless claims data may reignite labour market concerns.
- US dollar opens little changed
USDCAD open 1.3880, overnight range 1.3869-1.3886, close 1.3873, WTI 63.36, Gold 3341.06
The Canadian dollar was directionless in an uneventful market after the FOMC minutes failed to spark any market action.
WTI oil prices traded in a 62.78-63.48 range and are holding near the highs in New York. Support came from a sharper-than-forecast decline in US crude inventories, with stockpiles falling by 6.01 million barrels versus expectations for a 1.3 million draw, following a 3.06 million build the previous week.
US weekly jobless claims are projected to edge up by 1,000 to 225,000, while the Philadelphia Fed manufacturing index is forecast at 7, down from 15.9 a month ago. Stronger-than-expected readings would likely weigh further on expectations for a September rate cut.
August markets tend to drift aimlessly, and this year is no exception, especially with traders waiting for the Fed Chair's Jackson Hole remarks. What is different is the political backdrop--pressure from the White House has been shaping the narrative around FOMC policy. Odds for a 25 bp September cut have already slipped from the mid-90s to just over 81%, but the latest minutes struck a hawkish note, stressing inflation risks outweighing concerns over growth.
Asian equities delivered mixed signals. Australia's ASX 200 gained 1.13% after upbeat PMI results, while Japan's Topix lost 0.51% following Tuesday's record high. By early morning in Europe, stocks were weaker across the board, with the CAC 40 off 0.61%, the DAX down 0.30%, and the FTSE 100 lower by 0.28%. US futures pointed modestly lower with the S&P 500 off 0.15%, the 10-year yield sitting at 4.311%, gold at 3326.77, and the dollar index at 98.29.
EURUSD traded in a 1.1625-1.1663 range, finding its low ahead of Eurozone and German PMI reports before recovering. The composite PMI edged higher to 51.1 from 50.9, which ING analysts described as resilience in the face of global pressures, though they cautioned that momentum remains muted due to downside risks. The single currency remains stuck within its broader 1.1590-1.1730 corridor.
GBPUSD moved in a 1.3436-1.3483 band, echoing euro price action, with the upper end reached after PMI results. The flash composite index rose to 53.0 from 51.8, driven by services at 53.6, while manufacturing slipped to 47.3. S&P Global noted the economy has gathered pace over the summer, hitting its fastest expansion in a year. The currency is consolidating early-August gains and maintains an uptrend above 1.3460.
USDJPY drifted within a 147.26-147.80 range as traders stayed cautious ahead of Powell's Friday appearance and awaited inflation data due tomorrow. CPI is projected to ease to 3.0% y/y from 3.3%. A softer reading would dampen expectations for any near-term BoJ tightening.
AUDUSD fell to a three-week trough in a 0.6415-0.6437 band even though PMI readings improved across composite, manufacturing, and services. A pullback in consumer inflation expectations to 3.9% from 4.7% weakened the case for additional RBA hikes and weighed on the currency.
COMTEX_468203234/2559/2025-08-21T09:27:31
