| Wrap Up |
| The Canadian dollar was little changed against its U.S. counterpart, trading in a narrow range, as the currency lacked direction ahead of the expected Federal Reserve interest rate cut this week. Money markets are convinced the Fed will cut the key benchmark rate by 25 basis points, but it remains to be seen whether this is going to be a one-off cut or whether more cuts will follow. The Bank of Canada left its benchmark interest rate unchanged at 1.75% this month but highlighted the risks that trade wars pose to the global economy. Canadian government bond prices were lower across the yield curve, with the two-year bond down 5.5 Canadian cents to yield 1.518% and the 10-year bond falling 12 Canadian cents to yield 1.489%. |
| Levels and recommendations |
| Global stock markets trading in fairly narrow ranges today as investors looked ahead to an anticipated U.S. Federal Reserve rate cut later in the day. Markets have generally recovered their poise a day after being spooked by comments from President Donald Trump, who accused Beijing of trying to stall in trade talks through the 2020 presidential election in hopes of being able to negotiate with a more malleable Democrat. The euro is trading below 1.1150 mark as the euro-zone economy grew by 0.2% in the second quarter, as expected. However, core CPI missed with 0.9% against 1% expected along with strong US ADP data further underpinned demand for euros. The Canadian dollar is trading stronger around 1.3125 mark due to better than expected domestic GDP numbers for the month of May. The bullish sentiment around crude oil prices along with a subdued price action in US dollar provided additional boost to loonie. The USDCAD pair is expected to trade in the range of 1.3080-1.3150 levels for the day. |