| Wrap Up |
| The Canadian dollar edged lower against its U.S. counterpart but held onto most of the previous day’s gains as investors cheered news of a U.S.-China trade deal and after the Bank of Canada was untroubled by November’s jobs decline. The U.S. dollar rallied against a basket of major currencies and Wall Street’s main indexes hit record highs following news that the United States had reached a “deal in principle” with China to resolve a trade war that has rattled markets for nearly two years. A recent weakening in Canada’s labor market, underscored by major job losses in November, is unlikely to weigh heavily on future monetary policy decisions, Bank of Canada Governor Stephen Poloz said. The two-year bond fell 7 Canadian cents to yield 1.701% and the 10-year bond was down 80 Canadian cents to yield 1.671%. |
| Levels and recommendations |
| The US dollar fell against a basket of currencies as the prospect of a China-U.S. trade deal and an election victory for Britain’s Brexit-backing Conservative Party appeared to clear the fog on the global investment horizon, sapping safe-haven demand for the greenback. The British pound is trading higher around 1.335 levels against the US dollar as investors rushed to unwind bets on a weaker pound after a resounding election victory by Prime Minister Boris Johnson’s Conservative Party. The Russian rouble touched its strongest level versus the dollar in almost 18 months and stock markets rose, after the Russian central bank cut its key rate for the fifth time this year. The Canadian dollar is trading stronger around 1.3160 levels due to broader weakness seen in the US dollar index on the back of strong upsurge in sterling. On the other disappointing US retail sales data along with an uptick in crude oil prices has provided some additional support to loonie. The USDCAD pair is expected to trade in the range of 1.3143-1.3180 levels for the day. |