A Quiet Morning to Begin the Day

It has been a quiet morning so far to start the day as the moves have been limited with not much going on in terms of economic news or in terms of political news or speeches. The biggest gainer over the last 24 hours has been oil as hectic negotiations continue to take place on the sidelines ahead of the OPEC meeting that is scheduled to take place in November. The market hopes for details of production cuts to be announced during the course of the meeting and it also hopes that the details will include information on who will be cutting how much of their production in a measure that would help to boost the oil prices.

This helped the oil prices to climb which has in turn helped the CAD to gain strength across the board as the USD/CAD has dropped by over 120 pips over the past 24 hours after many days of consolidation and ranging. The Canadian economy is tied to oil prices and any rise in oil prices is bound to increase CAD strength.

Meanwhile, the yen continues to remain weak as USDJPY broke through 109 overnight and continues to remain strong as the corrections in the price have been shallow and have been quickly met with some strong buying. The general theme today morning has been slight USD weakness, something that was witnessed yesterday as well. But yesterday, as the day wore on, the USD strength returned and it remains to be seen whether something similar would happen today as well. The market has been aggressively pricing in a Fed rate hike in December and the markets consider the rate hike as a done deal. But the markets have failed to gauge the mood correctly twice before this year and hence, this assumption also needs to be taken with a pinch of salt though the bullish Fed members continue to add fuel to the fire by supporting such a move in their public speeches.
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