This morning, the Japanese yen is recovering after an initially slumping at the open. Abe’s victory is thought to point to a looser monetary policy, but it seems markets may have got ahead of themselves first thing this morning. The USD/JPY gapped higher, as did other yen pairs, but this move is reversing as we move through the morning.
This reversal is impacting the dollar, as the greenback has opened on the back foot this morning, helping the main dollar pairs to rise. The GBP/USD and AUD/USD are on the up, but the EUR/USD has some way to go after gapping lower at the open.
The pound continues to out-perform after better than expected public spending figures on Friday and a EUR/USD slump. The EUR/GBP reversed significantly in the final trading session of last week and is trading lower again this morning.
The USD/CAD shot higher Friday after dire Canadian inflation and retail sales. The pair is pulling back slightly this morning.
Gold gapped lower at the open, but is recovering a little as we move through the morning.
We have a relatively quiet day today on the economic news front.
We have Canadian Wholesale sales at 13.30.
The USD/CAD has strengthened considerably since the start of September as the US dollar recovers and the Canadian dollar struggles despite oil prices sustaining above $55.00.
We could see a continuation of Friday’s push higher, leading to further upside for the USD/CAD over coming weeks.