| Wrap Up |
| The Canadian dollar edged higher against its U.S. counterpart, with the currency recovering from an earlier eight-day low as the greenback was pressured by heightened bets that the Federal Reserve would lower interest rates at the end of July. The U.S. dollar declined against a basket of major currencies after New York Federal Reserve President John Williams said policymakers need to add stimulus early to address too-low inflation when U.S. interest rates are near zero and said they cannot wait for economic disaster to unfold. The price of oil, one of Canada’s major exports, was pressured by expectations that crude output would rise in the Gulf of Mexico following last week’s hurricane in the region. Canadian government bond prices were higher across the yield curve, with the 2-year bond up 6.3 Canadian cents to yield 1.453% and the 10-year bond rising 29 Canadian cents to yield 1.497%. |
| Levels and recommendations |
| Global stocks rose as investors firmed up bets on a U.S. interest rate cut at the end of July after a speech by top Federal Reserve official further cemented expectations for one, fuelling appetite for risky assets and capping the dollar. In oil markets, crude oil prices surged after the US said its navy had destroyed an Iranian drone, a major chokepoint for global crude flows, raising concerns about supply disruptions. The euro weakened below 1.1225 mark from Italy after Lega Nord’s leader M.Salvini said he will meet coalition partner L.Di Maio from the 5-S M against rising rumours of a government crisis and the probability of snap elections. The Canadian dollar is trading weaker above 1.3075 levels after disappointed domestic retail sales data for the month of May. There has been a broader strength in the US dollar index against the basket of major currencies. Further movement in the USDCAD pair will largely depend on outcome from US Fed meeting due in July end. The USDCAD pair is likely to trade in range of 1.3050-1.3125 levels for the day. |