| Wrap Up |
| The Canadian dollar was little changed against its U.S. counterpart, recovering from an earlier eight-day low as domestic jobs data loomed and Beijing signaled a ‘phase one’ trade deal with the United States was close to being sealed. The Canadian province of Ontario, the world’s biggest sub-sovereign debtor, kept its focus on spending restraint in a budget update that included a small business tax break and cut the deficit forecast for the current fiscal year. Canada’s employment report for October is due on Friday, which could help guide expectations for the Bank of Canada’s policy outlook. The gap between the 2- and 10-year yields narrowed by 3.9 basis points to a spread of 1.6 basis points in favor of the shorter-dated bond, which was the smallest gap since July 29. |
| Levels and recommendations |
| The US dollar gained versus the yen on after comments from a Chinese commerce ministry spokesman about the terms of a possible trade deal prompted investors to dump perceived safe-havens such as the Japanese currency. The British pound fell to a two-week low after two Bank of England officials unexpectedly voted to cut interest rates this month and others said they would consider a cut if global and Brexit headwinds did not lift. The Polish zloty, Hungarian forint and Czech crown rallied in October, buoyed by a boost to sentiment from progress in discussions over the UK’s departure from the European Union and trade between the U.S and China. The Canadian dollar is trading flat around 1.3175 levels as US dollar index preserve its strength after Bank of England’s dovish tone yesterday. On the other crude oil prices continues to provide strong support to loonie. The USDCAD pair movement will largely depend on outcome of domestic labour market report due on Friday. The pair is likely to trade in range of 1.3143-1.3190 levels. |