| Wrap Up |
| The Canadian dollar weakened to a four-day low against its U.S. counterpart, despite increasing oil prices, as the greenback rallied broadly on rising global risk appetite. The U.S. dollar strengthened against a basket of currencies as risk sentiment gradually improved after a week of turmoil on hopes that major central banks would look to launch fresh stimulus. The price of oil, one of Canada’s major exports, was up after a weekend attack on a Saudi oil facility by Yemen’s Houthi forces and as traders looked for signs that top economies would take measures to counteract a global slowdown. Canadian government bond prices were lower across the yield curve in sympathy with U.S. Treasuries. The two-year bond fell 4.5 Canadian cents to yield 1.359% and the 10-year bond was down 14 Canadian cents to yield 1.178%. |
| Levels and recommendations |
| Global stock markets edged higher as investors welcomed signs that more monetary and fiscal stimulus was on its way, hoping more easing would help stave off a major global economic downturn. After a tumultuous first half of August when investors dumped equities and poured their money into government debt and other safe havens, some calm has returned to markets this week amid talk of more stimulus in China and Germany. Investors sold Italian government debt as the head of the ruling 5-Star Movement signaled the imminent demise of the coalition government by thanking Prime Minister Giuseppe Conte for his time in office. The Canadian dollar is trading flat after disappointed domestic manufacturing data for the month of July. However, the downside in CAD is capped due to an uptick in crude oil prices which provided some support to loonie. The USDCAD is expected to trade in the range of 1.3286-1.3352 levels for the day. |