| Wrap Up |
| The Canadian dollar weakened to a near one-month low against the greenback as interest rate differentials moved further in favor of the U.S. currency. The loonie lost ground despite a higher price for oil, one of Canada’s major exports. U.S. crude oil, supported by rising tensions between the West and Iran and a big decline in U.S. crude stockpiles, but gains were capped due to lingering worries about slowing economic growth that could reduce fuel demand. Meanwhile, data from Statistics Canada showed that average weekly earnings of nonfarm payroll employees were up 3.4% from the previous year, the highest year-over-year growth rate since February 2018. The 2-year bond fell 3 Canadian cents to yield 1.443% and the 10-year bond was down 19 Canadian cents to yield 1.464%. |
| Levels and recommendations |
| Global shares were mixed as investors kept an eye on the China-U.S. trade situation and watched for signs of what’s in store from central banks. The euro has had a much more subdued session and it is trading flat at 1.1140 levels following a bout of extreme volatility yesterday in response to the ECB meeting. The ECB did, however, signal that a rate cut would likely be necessary in the coming months. The British pound has been under pressure and is trading around 1.2425 levels as the fallout from the announcement of Boris Johnson as the new UK PM continues. With Johnson’s appointment comes the increased risk of a no-deal Brexit which is weighing on pound. The Canadian dollar is trading weaker above 1.3175 mark due to stronger than expected US GDP data which came in at 2.40%. This has led to a broader strength in US dollar index and paved the investors’ expectations for an aggressive US Fed rate cut in its FOMC meeting next week. The gain in crude oil prices did very little to have a positive impact on Canadian dollar. The USDCAD pair has breached his resistance level of 1.3150 and it’s expected to trade in the range of 1.3150 and 1.3200 levels for the day. |