| Wrap Up |
| The Canadian dollar strengthened against its U.S. counterpart, recovering from an earlier loss after a decline in July employment numbers, as the increase in wages firmed investors’ belief in a strong Canadian economy. Canada’s economy lost a net 24,200 jobs in July, after shedding 2,200 in the previous month but grew by 1.9% from the last year, also showed domestic data. The rise of the loonie came as the price of oil, one of Canada’s major exports, increased on Friday, supported by a drop in European inventories and OPEC output cuts despite the International Energy Agency forecasting demand growth. Canadian government bond prices were lower across the yield curve, with the two-year bond down 4.5 Canadian cents to yield 1.4% and the 10-year bond falling 26 Canadian cents to yield 1.3%. |
| Levels and recommendations |
| Persistent concerns about a prolonged U.S.-China trade war and a no-deal Brexit kept the yen and bond bulls charging on Monday, while Argentina’s markets were set to crash after voters gave its president an election mauling. The Argentina peso were bracing for impact after voters there soundly rejected President Mauricio Macri’s austere economic policies in primary elections, casting serious doubt on his chances of re-election in October. The euro has kicked off the by falling below 1.1200 mark as Italy’s Salvini is calling for elections. The British pound is trading around 1.2050 as MPs are contemplating ways to prevent a no-deal Brexit by forcing the government to ask for an extension to Article 50. The Canadian dollar is trading flat at an important resistance of 1.3225 levels as the US dollar index is falling due to the fall in US treasury yields which capped the downside for CAD. The rise in crude oil prices has support loonie. There is no significant economic data release for the day and therefore the USDCAD pair is expected to trade in the range of 1.3200-1.3250 levels. |