| Wrap Up |
| The Canadian dollar strengthened to a one-week high against its U.S. counterpart, clawing back its earlier decline, as investors grew optimistic that top-level trade talks between the United States and China would yield at least a partial deal. The U.S. dollar index fell to two-week lows, with safe-haven demand for the currency waning as investors grew optimistic about a U.S.-China trade deal as well as a potential agreement on Britain’s exit from the European Union. Oil prices rose, buoyed by comments by the head of OPEC that the organization could take action to balance oil markets and that it will decide in December on supply for next year. Canadian government bond prices were lower across a steeper yield curve in sympathy with U.S. Treasuries. The two-year bond fell 10.5 Canadian cents to yield 1.534% and the 10-year bond was down 81 Canadian cents to yield 1.397%. |
| Levels and recommendations |
| Global shares basked in optimism over signs of a detente in the U.S.-China trade war and hopes that Britain was moving closer to a smooth exit from the European Union. The British pound is trading around 1.2660, up nearly 2%. The EU gave a green light to intensive Brexit talks as a deal are within reach. Reports that the UK made a concession on Northern Ireland are emerging. The euro pair is extending its gains above 1.1050 on the back of Brexit optimism, trade war hopes. ECB’s Draghi called governments to do more, but risk-on rules. The Canadian dollar is trading stronger around 1.32 mark after domestic data showing a much bigger-than-expected jobs gain in September. Chances of a BoC interest rate cut at the October 30 policy decision dipped to 7% from 9%. Also the increase in crude oil prices provided further boost to the CAD. The USDCAD pair has an immediate resistance at 1.3150 levels and it is expected to trade in the range of 1.3175-1.3225 levels for the day. |