| Wrap Up |
| The Canadian dollar strengthened against its U.S. counterpart, with the currency rebounding from an eight-day low it hit the previous session as investor appetite for risk increased. Speculators have cut their bullish bets on the Canadian dollar to the lowest in five weeks, data from the U.S. Commodity Trading Commission showed. As of Aug. 13, net long positions had decreased to 14,200 contracts from 24,166 in the prior week. Meanwhile, foreign investors sold a net C$3.98 billion in Canadian securities in June, led by federal bonds, domestic data showed. It was the third divestment in four months. Canadian government bond prices were lower across a steeper yield curve, with the two-year bond down 3.5 Canadian cents to yield 1.328% and the 10-year bond falling 36 Canadian cents to yield 1.141%. |
| Levels and recommendations |
| The safe-haven yen and Swiss franc retreated against the dollar, as risk sentiment gradually improved after a week of turmoil on hopes that major central banks would look to launch fresh stimulus measures to lift their sluggish economies. The Japanese currency fell for a third straight session versus the greenback, while the Swiss unit slid to a two-week low against the dollar. China also unveiled interest rate reforms expected to lower corporate borrowing costs, which helped lift the market’s mood, while the prospect of Germany’s coalition government ditching its balanced budget rule to take on new debt and launch stimulus steps also boosted risk appetite. The Canadian dollar is trading flat despite broader strength in US dollar as renewed trade optimism following the Trump administration’s decision to delay the ban on Chinese tech firm ease concerns over a dismal energy demand outlook and allowed crude oil prices to stage a decisive recovery. Moreover, reports of a drone attack on a Saudi oil facility by Yemeni separatists provided an additional boost to crude oil prices and provided support to loonie. The USDCAD pair is expected to trade in the range of 1.3225-1.33 levels for the day. |