Wrap Up
The Canadian dollar strengthened against its U.S. counterpart as the greenback broadly fell and domestic data supported the view the economy is recovering after a slow patch at the turn of the year.
The U.S. dollar index softened against most major currencies in step with lower U.S. bond yields and expectations the Federal Reserve would lower interest rates, reversing some of the prior day’s gains tied to stronger-than-forecast retail sales data.
The gain for the loonie came even as the price of oil, one of Canada’s major exports, fell for the third straight day after U.S. government data showed large builds in refined product stockpiles.
The two-year bond rose 6 Canadian cents to yield 1.527% and the 10-year bond was up 48 Canadian cents to yield 1.535%. The 10year yield touched its lowest intraday since July 5 at 1.532%.
Levels and recommendations
Global shares slipped on growing signs that a trade dispute between the United States and China was taking a toll on corporate earnings, with nerves spreading from Wall Street through Asia to European markets.
The US dollar index slipped for a second day against its rivals on the back of softer U.S. Treasury yields, with investors focusing their attention on the Fed’s meeting next week.
The British pound is trading higher at $1.2475, off its lowest since April 2017 touched on Wednesday amid growing risks of Britain leaving the European Union in a no-deal Brexit.
The Canadian dollar is trading lower at 1.3070 levels on the backdrop of US dollar getting minor lift following the release of stronger-than-expected Philly Fed manufacturing index for the month of July. On the other hand, the release of Canadian ADP report, showing an additional of 30.4K non-farm industry jobs capped the downside for CAD. The USDCAD pair is trading above its long-term support of 1.3050 levels and is likely to trade in range of 1.3025-1.3075 for the day.