| Wrap Up |
| The Canadian dollar was little changed against a broadly stronger U.S. counterpart, with the currency holding on to its gains for the month after it had been supported by the Bank of Canada’s divergence from other central banks. A steady policy stance from the Bank of Canada this year has been supported by a robust domestic jobs market and an inflation rate that has hovered around the central bank’s 2% target. Other central banks, including the U.S. Federal Reserve have eased. Relative strength for the loonie came as Canadian PM Justin Trudeau’s Liberal Party promised billions of dollars of new spending in a campaign platform ahead of next month’s federal vote. Canadian government bond prices edged lower across yield curve, with the 2-year bond down 1.5 Canadian cents to yield 1.583% and the 10-year bond falling 7 Canadian cents to yield 1.366%. |
| Levels and recommendations |
| The US dollar index climbed to a 29-month high as a blizzard of soft global data left the U.S. economy as the only one still looking reasonably healthy. European stocks and the euro both suffered shaky mornings, after euro zone manufacturing data showed the sharpest contraction in almost seven years. The Australia’s dollar tumbled after its central bank cut interest rates in its trade war-hit economy for the third time this year. That dragged the neighboring New Zealand dollar to a four-year low. The Canadian dollar is trading weak around 1.3280 levels after disappointing release of domestic GDP data which showed that the economic growth remained flat in the month of July. On the other hand a modest uptick in crude oil prices is the only factor that is providing some support to loonie. The USDCAD pair has an immediate support at 1.3290 levels and it is expected to trade in the range of 1.3225-1.3290 levels for the day. |