| Wrap Up |
| The Canadian dollar weakened slightly against its U.S. counterpart, nearing a one-month low it hit the previous day, as investors awaited U.S. economic data that could help guide the Federal Reserve’s interest rate decision next week. The Fed is expected to cut interest rates by 25 basis points at the end of the month but investors are not sure how much additional easing to expect from the central bank through the rest of the year. The price of oil, one of Canada’s major exports, fell 1% on Wednesday, failing to draw lasting support from a large decrease in U.S. crude stockpiles as investors worried about global oil demand. The 10-year yield touched its lowest intraday level since July 4 at 1.452, while the gap between Canada’s 10-year yield and its U.S. counterpart widened by 1.9 basis points to a spread of 59.6 basis points, the biggest gap since June 19. |
| Levels and recommendations |
| The euro and bond yields wilted in a sweltering Europe as the European Central Bank signalled it was ready for even deeper sub-zero interest rates and to restart its mass bond buying programme. The British pound is trading at 1.25 mark after falling for several sessions as market participants feared the looming possibility of a no-deal Brexit under Britain’s new prime minister, Boris Johnson. The Turkish lira is trading flat at 5.68 levels against the US dollar after the pair making high of 5.77 as country slashed its main interest rate to 19.75% from 24% in the first rate meeting since President Tayyip Erdogan sacked the former central bank chief for not cutting rates fast or furiously enough. The Canadian dollar is trading stronger at 1.3125 levels despite upbeat US macro data as US dollar pullback from fresh multi-week tops – primarily led by a dramatic turnaround in the shared currency. In addition the strong uptick in crude oil prices further underpinned demand for the commodity linked currency – loonie. The USDCAD pair is likely to trade in the range of 1.3125 and 1.3175 levels for the day. |