| Wrap Up |
| The Canadian dollar strengthened to its highest in nearly a month against the greenback as data showed Canada’s trade deficit narrowed and a Bank of Canada official expressed confidence in the economic outlook. Bank of Canada Deputy Governor Timothy Lane said recent data supported the central bank’s forecast that the economy’s slowdown in the third quarter will be temporary. Chances of an interest rate cut in January have fallen to less than 10% from 20% before Wednesday’s rate decision, data from the overnight index swaps market showed. Canadian government bond prices were lower across a steeper yield curve, with the benchmark 10-year bond falling 53 Canadian cents to yield 1.602%. The 10-year yield touched its highest intraday level since Nov. 12 at 1.624%. |
| Levels and recommendations |
| The US dollar rose after five straight days of losses, bolstered by data showing the U.S. economy created way more jobs than expected in November, backing the Federal Reserve’s stance of keeping interest rates on hold after cutting them three times. Sterling slipped, consolidating after three days of gains that took the pound to a 7-month high against the dollar on expectations that the Conservative Party will win next week’s British election. The New Zealand dollar was perched near four-month peaks having out flown all competitors this week as a run of upbeat economic data and a favourable ruling on bank capital gave it a major lift on its Australian peer. The Canadian dollar is trading weaker around 1.3250 levels after weak domestic employment data which raised expectation from BoC to raise interest rates in coming months. Meanwhile stronger US employment data further kept some pressure on CAD which was partially offset by increase in crude oil prices. The USDCAD pair is trading above its resistance level of 1.3224 and it is expected to trade in range of 1.3224-1.3290 levels for the day. |