| Wrap Up |
| The Canadian dollar strengthened to a two-week high against the greenback as investors cut bets that the Bank of Canada would ease interest rates over the coming months after upbeat comments by the central bank on the global economy. Canada’s central bank held its overnight rate at 1.75% as expected and cited early signs the global economy was stabilizing, while stressing that uncertainty caused by trade wars remained the main threat to its outlook. Domestic data showed that labor productivity grew by 0.2% in the third quarter, as both hours worked and business output slowed, Statistics Canada said. Canadian government bond prices were lower across the yield curve, with 2-year bond down 15.5 Canadian cents to yield 1.638% and 10-year bond falling 89 Canadian cents to yield 1.545%. |
| Levels and recommendations |
| The US dollar retreated towards one-month lows against a basket of currencies, pressured by a slew of weaker-than-expected economic data and this week’s robust performance by the euro and the British pound. The British pound hit 2-1/2-year highs versus the euro, on growing confidence that next week’s election will give the Conservative Party the parliamentary majority it needs to deliver Brexit, ending near-term uncertainty. Central Europe’s main currencies will struggle to appreciate in the next year, with the Hungarian forint seen sticking near record lows and only the Czech crown expected to eke out small gains. The Canadian dollar is trading stronger around 1.3180 levels as a potential easing of global economic risk reduces pressure on the Bank of Canada to ease interest rates going forward. This coupled with a goodish intraday rally in crude oil prices, supported by a larger than expected drop in the US inventories, provided an additional boost to loonie. The USDCAD pair has an immediate support level placed at 1.3150 levels. |