| Wrap Up |
| The Canadian dollar edged higher against the greenback, clawing back its earlier decline, after domestic wholesale trade data supported bets that the Bank of Canada would leave interest rates unchanged this year. The Bank of Canada has kept its benchmark interest rate on hold at 1.75% in 2019 even as some of its major peers, including the U.S. Federal Reserve, have eased. Canadian wholesale trade increased by 1.7% in July from June on stronger sales in the personal and household goods subsector, as well as motor vehicles and parts, Statistics Canada said. Canadian government bond prices were higher across the yield curve in sympathy with U.S. Treasuries. The two-year bond rose 3 Canadian cents to yield 1.557% and the 10-year bond was up 17 Canadian cents to yield 1.368%. The 10-year yield touched its lowest intraday level since Sept. 10 at 1.339%. |
| Levels and recommendations |
| The US dollar index turned flat as some positive headlines from the US-China trade front appears to have lent some support to the buck leading to lower US yields. The British pound initially climbed as high $1.2497 on the view it would help prevent the UK being bundled towards a ‘no-deal’ Brexit at the end of October. The euro is trading above 1.1010 mark as US dollar fell after US consumer confidence fell by more than anticipated in September to 125.10. This has resulted in some bounce in euro. The Canadian dollar is trading flat around 1.3257 levels due to lack of any fundamental drivers making it difficult for the pair to make a decisive move. However, there won’t be any macroeconomic data releases today that could impact the loonie. Investors are likely to keep an eye on crude oil prices as a potential catalyst. The USDCAD pair is expected to trade in the range of 1.3225-1.3290 levels for the day. |