| Wrap Up |
| The Canadian dollar edged lower against its U.S. counterpart as domestic data showing the first retail sales gain in three months failed to impress investors. Canadian retail sales rose 0.4% in July from June on stronger sales of new cars at motor vehicle and parts dealers, Statistics Canada said. The increase was less than the 0.6% gain that analysts expected, while sales volumes saw no growth. Money markets see about a 30% chance that the Bank of Canada would cut interest rates by the end of the year. The central bank has stayed on hold so far in 2019 even as some of its global peers, including the U.S. Federal Reserve, have eased. Canadian government bond prices were higher across a flatter yield curve in sympathy with U.S. Treasuries. The two-year bond rose 5 Canadian cents to yield 1.574% and the 10-year bond was up 47 Canadian cents to yield 1.387%. |
| Levels and recommendations |
| Global shares sank as weaker-than-expected economic data added to investor worries over the unresolved U.S.-China trade dispute’s effects on the world economy. The euro fell 0.4% to $1.0966 after the German Purchasing Managers’ Index (PMI) release, its lowest in over a week against the dollar. The British pound is trading closer to 1.24 as PM Johnson has expressed optimism ahead of meetings with EU leaders in New York. The opposition labour Party’s is trying to iron out its position on Brexit. The Canadian dollar is trading weak around 1.3270 levels despite strong domestic wholesale sales data for the month of August. This coupled with an intraday slide in crude oil prices, triggered by news that Saudi oil production is set to be restored by next week, further undermined demand for loonie. The USDCAD pair has an immediate support at 1.3290 levels and it is expected to trade in the range of 1.3224 – 1.33 levels for the day. |