| Wrap Up |
| The Canadian dollar strengthened against its U.S. counterpart, paring this week’s decline, as domestic data showed narrowing in the trade deficit and investor worries receded about the state of the global economy. The Canadian dollar will gain ground against its U.S. counterpart over the coming year, supported by strengthening of the domestic economy and a narrower gap between Canadian and U.S. interest rates. Speculators have raised their bullish bets on the Canadian dollar, data from the U.S. Commodity Trading Commission showed. As of Oct. 1, net long positions had increased to 6,327 contracts from 4,592 in the prior week. Canadian government bond prices were higher across a flatter yield curve, with the 2-year bond rising 1.5 Canadian cents to yield 1.413% and 10-year bond up 18 Canadian cents to yield 1.232%. |
| Levels and recommendations |
| Global stocks edged up globally as broadly positive U.S. jobs data from last week quelled some fears about an economic slowdown, but nervousness over U.S.-China trade talks persisted and more weak European economic data trickled in. The euro was flat at $1.0983 and Sterling was lower on investors’ fears that Britain and the European Union are no closer to agreeing a Brexit withdrawal deal. The Japanese yen is trading flat after Japanese economic index fell in August and the government downgraded its outlook for the economy to “worsening,” suggesting export-reliant Japan could slip into recession. The Canadian dollar is trading stronger around 1.33 levels after crude oil prices gathered strength due to political uncertainties in Middle eastern oil producers which revived concerns over supply disruptions. On the other hand poor US employment data from the previous week helped to gain further for CAD. The USDCAD is expected to trade in the range of 1.3290-1.3345 levels for the day. |