| Wrap Up |
| The Canadian dollar weakened against its U.S. counterpart, giving up gains it made after data showing stronger-than-expected GDP growth for the second quarter, as oil prices fell and the greenback broadly rallied. The Canadian economy expanded at a surprisingly strong annualized rate of 3.7% in the second quarter, a pace much higher than the BoC had predicted, thanks to resurgence in goods exports. Meanwhile, the price of oil, one of Canada’s major exports, fell ahead of a hurricane near the Florida coast that could dampen demand. Canadian government bond prices were lower across a steeper yield curve, with the 2-year bond down 1 Canadian cent to yield 1.353% and the 10-year bond falling 15 Canadian cents to yield 1.164%. |
| Levels and recommendations |
| Global stocks slipped and the dollar strengthened to its highest levels in more than two years as U.S.-China trade tensions drove investors to the relative shelter of gold, the Japanese yen and government debt. Sterling was the big mover in currency markets, nearing a three-year low below $1.20 with British Prime Minister Boris Johnson set for a showdown with Parliament over a no-deal Brexit. With U.S. markets shut on Monday, global markets took their cue from weak PMI survey data in Europe and China which raised concerns the global economy was struggling on many fronts. The Canadian dollar is trading week around 1.3350 levels due to broader strength seen in the US dollar index. The slump in crude oil prices further dented the demand for loonie. The Canadian dollar is reversing its loses after release of poor US manufacturing data. The USDCAD pair has an immediate support at 1.3375 levels and it is expected to trade in the range of 1.3325-1.3375 levels for the day. |