| Wrap Up |
| The Canadian dollar strengthened to a five-week high against its U.S. counterpart as domestic data showing a bigger-than-expected jobs gain in August reduced investor expectations for a Bank of Canada interest rate cut next month. Canada’s economy added 81,100 jobs in August, largely driven by increases in part-time work, Statistics Canada data showed. That was much more than the 15,000 increase than the expectations. Gains for the loonie came as the U.S. dollar was pressured by data showing U.S. employers added fewer workers than expected in August and as Federal Reserve Chair Jerome Powell promised the central bank will continue to act “as appropriate” to sustain an economic expansion. The gap between Canada’s two-year yield and its U.S. equivalent narrowed 4.8 basis points to a spread of -4.0 basis points, its narrowest gap since October 2017. |
| Levels and recommendations |
| Global stocks gained as investors pinned their hopes on expected stimulus from the world’s central banks to support slowing growth, while the pound hit a six-week high on hopes that Britain will not quit the EU without a deal. The British pound hit a six-week high of $1.2385 as investors saw the threat of a “no-deal” Brexit easing as British Prime Minister Boris Johnson will try for a second time to call a snap parliamentary election. The euro is trading above 1.1050 as European Central Bank is expected to unveil new monetary stimulus measures on Thursday. The Canadian dollar is trading stronger as there is broader weakness seen in the US dollar index after softer US Non-farm payroll data came in on Friday. On the other hand loonie has got strong support from increase in crude oil prices as Saudi Arabia will continue to support output cuts by OPEC under Energy Minister Prince Abdulaziz bin Salman. The USDCAD pair is expected to trade in the range of 1.3143-1.32 levels for the day. |