Loonie’s weakness continues from last week.
Monday 4 November, 2019
Daily Currency UpdateCAD - Canadian DollarIn the absence of economic data in Canada today, the Loonie's weakness seen last week came from dovish Bank of Canada comments after Governor Poloz and company left interest rates unchanged at 1.75 percent. The BoC hinted at lowering the benchmark interest rate in the future if economic conditions don't pick up globally and in the United States (Canada's main trading partner). On the domestic front, real gross domestic product edged up 0.1 percent in August, but below expectations of 0.2 percent, showing that Canada is not immune to global economic deceleration. Tomorrow will be an interesting session when Statistics Canada publishes the trade balance at 9:30 am EST. Technically speaking, the USD/CAD is trading slightly to the upside (weaker Loonie). It shows a first resistance level at 1.3163, followed by 1.3191. On the other side, key support levels are 1.3130 followed by 1.3118. However, the "risk-on" environment might help the Loonie in the next hours. Commerce Secretary Wilbur Ross said, "…there's no natural reason," a phase one trade deal between the U.S. and China could not be signed this month. He added that the U.S. might not need to place tariffs on imported automobiles after "good conversations" with manufacturers in the European Union, Japan, and other countries. Since the announcement of the phase one deal on Oct. 11th, the S&P 500 has rallied by more than 4 percent, and it continues setting record high closes.
Key Moversuropean Central Bank President Christine Lagarde gives her first speech in her new role in Berlin later today. Technically speaking, the EUR/USD pair is looking vulnerable to the downside; however, it has continued to trade sideways over the last couple of days. On the last weekend, before the U.K. enters an election campaign, Prime Minister Boris Johnson admitted he's at least partly responsible for failing to deliver on his "do or die" pledge to deliver Brexit by Oct. 31st and apologized for not being able to get it done. Johnson also promised to push his deal through Parliament "very fast" if his Conservative Party wins the general election on Dec. 12th.
- USD/CAD: 1.3118 - 1.3163 ▲
- EUR/CAD: 1.4623 - 1.4719 ▼
- GBP/CAD: 1.6933 - 1.7055 ▼
- AUD/CAD: 0.9036 - 0.9141 ▼
- NZD/CAD: 0.8436 - 0.8496 ▼