| Wrap Up |
| The Canadian dollar edged higher against the greenback, as investors’ worries about prospects for a trade deal between the United States and China were offset by bets that the Bank of Canada would leave interest rates on hold this week. Money markets see almost no chance of an interest rate cut by the central bank on Wednesday, after Governor Stephen Poloz said nearly two weeks ago that monetary conditions were about right given the current economic situation. Global stock markets fell after Trump said a trade agreement with China might have to wait until after the U.S. presidential election in November 2020, denting hopes of a resolution soon to a dispute that has weighed on the world economy. The two-year bond rose 10.5 Canadian cents to yield 1.554% and the 10-year bond was up 78 Canadian cents to yield 1.449%. |
| Levels and recommendations |
| The US dollar traded near one-month lows as markets remained jittery about the progress of Sino-U.S. trade talks and waited for U.S. data that could show whether the prolonged trade spat is starting to damage consumption in the United States. The British pound surged above $1.31 for the first time since early May, buoyed by growing expectations that Britain will avoid a hung parliament after next week’s election. The Australian dollar slipped from three-week highs after disappointing domestic data underlined expectations for additional rate cuts and offset upbeat economic news from China. The Canadian dollar is trading stronger around 1.3225 levels after BoC held its overnight rate at 1.75%, while stressing that uncertainty caused by trade wars remained the main threat to its outlook. Further decision on interest rate would largely depend on factors like trade wars, consumer spending and housing activity data. Meanwhile the crude oil prices provided further support to loonie. The USDCAD has an important support level at 1.3224 and it is expected to trade in range of 1.3224-1.3290 levels for the day. |