| Wrap Up |
| The Canadian dollar weakened to a near two-week low against the greenback as expectations rose that the Bank of Canada would cut interest rates after the central bank expressed greater concern about global trade uncertainty. Canada’s central bank held interest rates steady at 1.75% as expected but left the door open to a possible cut over the coming months to help the economy weather the damaging effects of global trade conflicts. The U.S. dollar fell against a basket of major currencies after the Federal Reserve eased for the third time since July but signaled no more reductions ahead. Canadian government bond prices were higher across the yield curve, with the 2-year bond up 29 Canadian cents to yield 1.558% and the 10-year bond rising 138 Canadian cents to yield 1.452%. |
| Levels and recommendations |
| Global stocks edged to their highest in over 20 months after the Federal Reserve cut rates even as it signaled it would hold back from further reductions, sending bond yields and the dollar down. The euro rose against the dollar after better than expected euro zone GDP data, while the U.S. currency fell after Federal Reserve appeared to leave open the question of whether it would cut interest rates further. The British pound rose and could score its biggest monthly rise in more than a decade as the combination of a weak dollar and the falling risks of Britain leaving the European Union without a deal has fuelled demand. The Canadian dollar is trading flat around 1.3160 levels post flat domestic GDP data for the month of August. On the other hand US personal income and personal spending data came in better which capped the gains for CAD. The USDCAD pair seems some fresh supplies at 1.32 levels after yesterday FOMC and BoC policy outcome. The USDCAD pair is expected to trade in the range of 1.3143-1.32 levels for the day. |