11.10.2016 Daily Market Analysis

The US dollar (USD) started the week in spectacular fashion, gaining across the board as investors now begin to price a Federal Reserve rate hike before the end of the year.

The USD has so far gained against all major currencies, with the exception of the Canadian dollar (CAD), ahead of Wednesday’s release of the FOMC (Federal Open Market Committee) minutes. The last minutes showed that three members had disagreed with the committee’s decision not to hike rates immediately, and investors will be keen to see how many more members have joined this camp. The case for a rate hike has strengthened since the last FOMC meeting, with the economy showing favorable employment growth as well as solid consumer spending. The USD/JPY traded at 103.94, up 0.33%, while the AUD/USD traded at 0.7580, down 0.37 percent.

Meanwhile, the US presidential debate also supported the bullish tone of the US dollar. With results showing Clinton extending her lead over Trump, the dollar will be well supported in the near term because of her favorable and tolerable economic, social as well as political policies. 

The Canadian dollar (CAD) has drifted higher against the US dollar following Russian President Vladimir Putin comments that Russia is ready to cut a deal with OPEC for an oil production freeze. Oil sentiment has been turning bullish of late and these comments only increased the momentum that saw crude oil prices touch a 12-month high. Canada is a major oil producing nation and the Canadian dollar will continue to strengthen as oil prices rise.

There is no major macroeconomic data scheduled for release today and US dollar sentiment as well as oil prices will continue to set the theme in the markets as investors wait for FOMC minutes due out tomorrow.