| Wrap Up |
| The Canadian dollar rose against the greenback, approaching a three-month high it notched the previous day, as investors expected further divergence in the interest rate policies of the Bank of Canada and the Federal Reserve. Canada’s central bank, which is due to make an interest rate decision on Oct. 30, has kept its benchmark rate on hold at 1.75% this year, as the domestic economy added jobs at a robust pace and inflation stayed close to its 2% target. Canadian Liberal PM Justin Trudeau said a middle-class tax cut would be the first order of business for his new minority government, which would seek support in parliament. Canadian government bond prices were higher across the yield curve, with the two-year bond up 2 Canadian cents to yield 1.615% and the 10-year bond rising 9 Canadian cents to yield 1.510%. |
| Levels and recommendations |
| Traders were sending European Central Bank chief Mario Draghi off in style, raising the region’s stocks to their highest in more than a year and nudging the euro towards its best month since January 2018. Turkey was the real mover though. It slashed its rates 250 basis points to 14% from 16.5%, a day after U.S. President Donald Trump lifted sanctions on Turkey following a ceasefire in northern Syria. The British pound is trading around at $1.29 after rising 0.3% on Wednesday. After more than three years, Britain appears closer than ever to resolving its Brexit conundrum but still has hurdles to clear. The Canadian dollar is trading weak around 1.3080 levels after modest uptick seen in the US dollar index. However the downside in CAD is seen limited as US Fed would cut interest rates again at its upcoming meeting on October 29-30. Coupled with this, crude oil prices increased due to an unexpected drop in the US inventories which led some support to loonie. |