| Wrap Up |
| The Canadian dollar weakened to a four-week low against its U.S. counterpart as oil prices fell and investors worried that a slowdown in U.S. manufacturing activity could hurt Canada’s trade-dependent economy. Wall Street’s main indexes suffered their sharpest one-day declines in nearly six weeks after employment and manufacturing data suggested that fallout from the U.S.-China trade war is further hurting U.S. economic growth. Oil prices fell after data showed a rise in U.S. crude inventories, adding to worries about an oversupplied market as weak economic readings in the US depressed global financial markets. Canadian government bond prices were higher across the yield curve in sympathy with U.S. Treasuries. The two-year bond rose 7.5 Canadian cents to yield 1.491% and the 10-year bond was up 41 Canadian cents to yield 1.309%. |
| Levels and recommendations |
| Global stocks hovered near four-week lows and yields on major benchmark bonds slipped after Washington moved to impose new tariffs on European goods, fuelling fears about global growth and dousing risk appetite. The British pound was unfazed at $1.2306 despite a surprise contraction as investors waited for a European Union response to Britain’s latest Brexit offer. So far, the last-ditch Brexit proposal offered by Prime Minister Boris Johnson on Wednesday has received a cool reception. One senior EU official said it “can’t fly” because it was an unworkable move backwards that left Britain and the EU far apart. The Canadian dollar is trading weak at 1.3340 levels as crude oil prices continues to fall, weigh heavily on the CAD. On the other hand US non manufacturing PMI data came in better than expected further underpinned the demand for loonie. The USDCAD has an immediate support placed at 1.3356 levels and it is expected to trade in the range of 1.3290-1.3356 levels. |