| Wrap Up |
| The Canadian dollar was little changed against its U.S. counterpart, holding near a one-month low it hit earlier in the day as the greenback broadly climbed and investors adjusted to the Bank of Canada’s more dovish stance. The U.S. dollar rose against a basket of major currencies after U.S. President Donald Trump in a speech offered no new details on the state of the administration’s trade war with China. The loonie has declined by as much as 1.3% since Oct. 30, when Canada’s central bank cut its economic growth forecasts and expressed concern about global trade uncertainty. Canadian government bond prices were lower across a steeper yield curve as trading resumed after a holiday on Monday. The two-year bond fell 2.5 Canadian cents to yield 1.598% and the 10-year bond was down 17 Canadian cents to yield 1.599%. |
| Levels and recommendations |
| Global shares fell from four-year highs after U.S. President Donald Trump threatened to “substantially” increase tariffs if China failed to agree a trade deal, and he also took a swipe at European Union trade policies. The British pound was slightly weaker against the U.S. dollar, as weak economic data, which should hurt sterling, is more than offset by supportive political developments in Britain. The New Zealand dollar boasted its biggest daily rise this year on after the country’s central bank surprised markets by keeping interest rates steady; wrong footing bears who had wagered heavily on a cut. The Canadian dollar weakened to a one-month low against its U.S. counterpart, adding to its decline since the Bank of Canada shifted to a more dovish stance as investors became more pessimistic about global trade conflicts. Further movement in the USDCAD pair will largely depend on the outcome of BoC Governor Stephen Poloz speech today, which could help guide expectations for the interest rate outlook. |