| Wrap Up |
| The Canadian dollar edged lower against its U.S. counterpart as the greenback broadly gained, but the loonie held near last week’s eight-month high ahead of an interest rate decision on Wednesday from the Bank of Canada. The U.S. dollar index hovered at a three-week high against a basket of major currencies as traders awaited Fed Chairman Jerome Powell’s testimony this week before Congress for clues about a rate decrease. The price of oil, one of Canada’s major exports, was supported by tensions over Iran’s nuclear program but gains were tempered by global economic growth concerns. Canadian government bond prices were mixed across a flatter yield curve, with the two-year bond price down 8 Canadian cents to yield 1.668% and the 10-year bond rising 4 Canadian cents to yield 1.567%. |
| Levels and recommendations |
| Global stocks fell for a third straight day after a stinging warning from German chemicals giant BASF about the effects of the global trade war and as hopes dwindled of a hefty U.S. interest rate cut. With global macroeconomic clouds looming and markets waiting for policy signals from U.S. Federal Reserve chief Jerome Powell on Wednesday, the focus of headlines and sentiment turned to three individual heavyweight stocks. The British pound slipped to a more than 2-year low against the dollar below 1.25 mark amid a worsening UK economic outlook and rising fears about a no-deal Brexit. The Canadian dollar is trading weaker above 1.31 mark due to impressive nonfarm payrolls data from the U.S which triggered a US dollar buying as investors seem to be having second thoughts about the Fed cutting rates multiple times this year. However, on the other hand an increase in crude oil prices along with strong domestic housing data helped the loonie limit its losses against the dollar. The USDCAD pair is expected to trade in range of 1.3075- 1.3145 levels for the day. |