| Wrap Up |
| The Canadian dollar strengthened to an 11-day high against its U.S. counterpart as the Bank of Canada’s willingness to keep interest rates on hold in the face of economic uncertainty helped “anchor” the currency. The Bank of Canada has showed no appetite for cutting interest rates amid steady domestic activity, even as other central banks, including the Federal Reserve, have eased this year. The gain for the loonie came as the government of Alberta announced plans to ease oil curtailments. Oil is one of Canada’s biggest exports so the steady erosion of curtailments since the start of the year could improve prospects for the economy. Canadian government bond prices were little changed across the yield curve, with the two-year bond flat to yield 1.575% and the 10-year bond rising 2 Canadian cents to yield 1.357%. On Wednesday, the 10-year yield touched its lowest intraday level in more than two weeks at 1.289%. |
| Levels and recommendations |
| Global shares largely shrugged off reports that Washington is considering delisting Chinese companies from U.S. stock exchanges, with market players downplaying the likelihood of such radical escalation of the U.S.-China trade war. The euro is trading below 1.09 mark after German advanced inflation figures tracked by the CPI came in short of expectations for the current month. The British pound remained unfazed by the mixed UK GDP revision. The UK GDP second estimate showed that the economy contracted by 0.2% q/q in the second quarter of 2019. The Canadian dollar is trading week around 1.3250 levels after disappointing domestic data. On the other hand reports suggesting that Saudi Arabia has sent messages to Iran’s president through the leaders of other countries helped ease the tension in the Middle East and weighed on crude oil prices which further underpinned the demand for loonie. The USDCAD is expected to trade in the range of 1.3225-1.3290 levels for the day. |