| Wrap Up |
| The Canadian dollar strengthened against its U.S. counterpart, adding to this week’s gains, driven by a less dovish interest rate outlook from the Bank of Canada compared with the Federal Reserve. Canada’s central bank on Wednesday left its benchmark interest rate steady at 1.75% and made clear it had no intention of easing monetary policy. That stance has contrasted with dovish guidance this week from the Fed. Gains for the loonie came as data from the U.S. Commodity Trading Commission showed that speculators have raised bullish bets on the currency. As of July 9, net long positions in the loonie rose to 9,226 contracts from 6,293 contracts in the prior week. Canadian government bond prices were higher across the yield curve, with the 2-year up 4.5 Canadian cents to yield 1.579% and the 10-year bond rising 21 Canadian cents to yield. |
| Levels and recommendations |
| Surprisingly upbeat economic soundings from China pushed world shares towards an 18-month high and steered the Aussie dollar upwards, as Citigroup delivered Wall Street’s first heavyweight beat of the new earnings season. China’s second-quarter annual GDP growth rate fell to a 27-year low of 6.2% as expected, but its quarterly growth reading of 1.6% was ahead of forecasts along with June reports on industrial production, retail sales and urban investment. The Australian dollar, often played as a liquid proxy for the Chinese yuan, sprang to its highest since July 4 against the US dollar as the greenback ticked higher against the yen. The Canadian dollar is trading flat at 1.3025 levels after the pair attempted modest bounce on Friday following the release of US Produce Price Index but was quickly sold after Fed Chair Jerome Powell’s dovish remarks which indicated that the US rate cuts are needed to boost inflation. The next immediate support for the USDCAD pair is 1.2975 ,while 1.3050 acting as the strong resistance for the pair |