| Wrap Up |
| The Canadian dollar strengthened to a near seven-week high against the greenback after a U.S.-China trade deal that could boost the global economy, but the currency gave up much of its gains as investor optimism was kept in check. Canada’s budget deficits will be larger than forecast for the next five years, Finance Minister Bill Morneau said in a fiscal update on Monday. That could give Ottawa less room to spend on new initiatives, which is economic stimulus that the Bank of Canada has been anticipating. Data on Monday from the Canadian Real Estate Association showed that Canadian home sales rose in November for the ninth straight month, up 0.6% from October. The two-year bond fell 6.5 Canadian cents to yield 1.694% and the 10-year bond was down 47 Canadian cents to yield 1.631%. |
| Levels and recommendations |
| The British pound tumbled, erasing its post-election gains, after news that Prime Minister Boris Johnson planned to take a hard line in Brexit talks with the European Union dashed hopes of an end to Brexit uncertainty. The Hungarian forint fell 0.4% against the US dollar, weakening beyond a key level against the euro, with investors on alert for potential changes to the Hungarian central bank’s unconventional policy toolkit. Turkey’s lira declined some 0.6% against the dollar to its weakest in almost two months, on concerns over ties with the United States and expectations of further central bank rate cuts. The Canadian dollar weakened slightly against the greenback, extending its pullback from a near seven-week high the day before, as worries about Brexit resurfaced and domestic data showed a surprise decline in manufacturing shipments. Meanwhile crude oil prices continues to provide some support to loonie. The USDCAD pair is trading above its support level of 1.3143 and it is expected to trade in the range of 1.3143-1.3175 levels for the day. |