| Wrap Up |
| The Canadian dollar weakened against the greenback, retreating from an earlier three-month high as positive investor sentiment was tempered ahead of interest rate decisions by the Bank of Canada and the Federal Reserve. The loonie has rallied about 2% since early October, buoyed by robust domestic jobs data and investor optimism that a U.S.-China trade deal could boost Canada’s commodity-linked economy. The Fed is also due to make an interest rate announcement on Wednesday. It is expected to lower the range for its policy rate to below the BoC equivalent rate for the first time since Dec 2016. Canadian government bond prices were higher across the yield curve, with the two-year bond up 2 Canadian cents to yield 1.7% and the 10-year bond rising 22 Canadian cents to yield 1.595%. |
| Levels and recommendations |
| The US dollar was largely steady against other major currencies as investors braced for a rate cut by the U.S. Federal Reserve and an advance reading of economic growth in the third quarter that could shed light on the rate outlook. Sterling tiptoed higher after British Prime Minister Boris Johnson won parliamentary approval to hold a general election in December though moves were tiny as large currency options expiring this week kept volatility subdued. The Australian dollar crept higher as data on domestic inflation proved no softer than expected, leading investors to price out almost any chance of a cut in interest rates next week. The Canadian dollar was little changed against its U.S. dollar, trading in a narrow range ahead of interest rate decisions on both sides of the border that could see the Federal Reserve policy rate dip below the Bank of Canada’s. On the other hand crude oil prices were little changed held back by worries about a possible delay in resolving the U.S.-China trade war. The USDCAD pair is expected to trade in the range of 1.3075-1.3115 levels for the day. |