| Wrap Up |
| The Canadian dollar weakened to an eight-day low against its U.S. counterpart as the greenback broadly climbed and investors saw potential for the Bank of Canada to try to slow the currency’s recent rally. The loonie has been the top-performing G10 currency this year as Canada’s economy showed signs of picking up in recent months and traders bet that Bank of Canada Governor Stephen Poloz would cut interest rates at a slower pace than the Federal Reserve. The U.S. dollar index gained against a basket of major currencies as investors reassessed their expectations of how much the Fed may cut interest rates this month. Fed Chief Jerome Powell is due to testify before Congress on Wednesday. Canadian government bond prices were higher across a steeper yield curve, with the 2-year bond up 6 Canadian cents and the 10-year bond rising 1 Canadian cent to yield 1.579%. |
| Levels and recommendations |
| Global shares were treading water while rising Treasury yields kept the dollar steady, as investors waited to hear whether the world’s most powerful central banker would confirm or confound expectations for a U.S. rate cut this month. The US dollar gained to 108.92 against the Japanese yen, though the French data helped the euro recover to $1.1225. The Mexican peso began to recover after sliding on Tuesday when Finance Minister Carlos Urzua suddenly resigned, citing “extremism” in economic policy. The Canadian dollar is trading stronger below 1.31 mark ahead of BoC meeting, as investors are on defensive mode in case policymakers tried to slow the currency’s recent rally. The loonie got some strong support as crude oil inventories fell far more than expected. The USDCAD pair is again trading near its long-term support of 1.3070 levels. Further movement in the pair will largely depends on BoC interest rate outcome and FED minutes. |