Fed Speeches in Focus as USD Climbs

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar        1.3680-1.3930

Euro                 1.6120-1.6370

Sterling            1.8520-1.8770

WTI Oil (opening level) $63.97

The CAD/USD is opening at 1.3814 ( 0.7239 )

The US Dollar has bounced up strongly against its Canadian counterpart, to regain most of the ground lost on Friday and return to levels past 1.3800, from the 1.3770 area at the day's opening. The pair is drawing some support from a cautious market sentiment in early European trade, with investors bidding their time, awaiting a batch of Fed speeches to provide further clues about the bank’s monetary policy plans.

Five policymakers from the Federal Reserve will speak later today, but the primary focus will be on the new appointment, Stephen Miran, who will talk about Non-Monetary Forces and Appropriate Monetary Policy at the Economic Club of New York. Miran is expected to defend his position as an independent board member, despite being appointed by Trump amid an unprecedented campaign to bend the central bank’s arm into accelerating its monetary easing cycle.

He will also delve into the reasons for supporting a 50 basis points rate cut last week, against the committee’s decision of a quarter-point rate cut. His speech is likely to draw some contrast with Fed Powell’s conference, scheduled for Tuesday.

In Canada, the CAD pared some losses on Friday, following Canadian Retail Sales figures. Consumption contracted in July, in line with expectations, but preliminary data anticipated a 1% increase in August, which makes up for July’s decline and eased hopes of back-to-back BoC rate cuts.

Headlines

·    US President Trump plans to introduce a new USD 100k fee for H-1B visas as part of the latest crackdown. The new rules are somewhat unclear, as one source said that existing visa holders would not be charged the fee, only new applicants.

·    The US Senate rejected a short-term funding bill, risking a government shutdown if no bill is passed by September 30. The Senate returns on September 29, and the House on October 7.

·    Elon Musk was seen at the funeral for the recently assassinated activist Charlie Kirk, sitting next to and shaking hands with President Trump.

Key Points

·    Equities: Fresh U.S. records on Fed cut, upgrades, and deal chatter; Europe flat with banks firm and shippers weak; Asia steady as Hang Seng held flat and Japan eased on BOJ’s ETF-unwind signal

·    Volatility: VIX mid-teens; SPX straddle ~±1%; macro data in focus; shutdown risk

·    Digital Assets: BTC down >2k overnight; ETH below 4.2k; USD 449m liquidations; IBIT inflows, ETHA mixed

·    Fixed Income: Japan’s yields from 2 to 10 years hit new post-GFC highs

·    Currencies: USD remains firm, especially against weak JPY

·    Commodities: Silver surges to fresh 14-year high, gold near record on firm ETF demand