The Loonie trades flat as Trump reflects on his tariffs
Monday 19 August, 2019
Daily Currency UpdateCAD - Canadian DollarThe U.S. dollar weakened against the Canadian dollar last Friday, with the Loonie rebounding from the eight-day low it hit during the previous session as market participants increased their appetite for risk. Technically speaking, the USD/CAD pair could not break above the 200 moving average of 1.3304, as the overnight global equity market rose along with optimism over the trade outlook, boosted by Trump’s comments. As mentioned last Friday in the daily commentary, the expectation for the USD/CAD pair to go higher was very low because of the moving average and the positive mood of the markets. The key support levels for today are 1.3250 and 1.3230, and the key resistance levels are 1.3286 and 1.3296. The risk-on mood was confirmed when President Trump said the U.S. is, “…doing very well with China,” and that talks are still happening; however, he signaled that he isn’t ready to sign a trade deal yet. The most critical piece of information from the weekend arose during a dinner with Apple CEO Tim Cook and Donald Trump on Friday night. Trump said Cook made a “good case” about the difficulty in competing with Samsung if Apple products are subject to import tariffs. In response, Trump commented, “I thought he made a very compelling argument ...It’s tough for Apple to pay tariffs if it’s competing with a very good company that’s not.” Are we going to see a change of heart from the White House?
Key MoversThis week is likely to be dominated by the Jackson Hole conference, with Federal Reserve Chairman Jerome Powell’s address on Friday. The European Central Bank announced that ECB members Lane, Coeure, and Lautenschlaeger would attend Jackson Hole. Mario Draghi is not attending, but his tenure is up soon. On the other side of the continent, Australia’s dollar stopped falling as optimism about planned U.S.- China trade talks have boosted equities and other risk assets. Furthermore, Treasurer Josh Frydenberg said in an interview with Sky News that Australia is as well placed as any nation to handle the fallout from U.S.-China trade tensions and any slowdown in global growth.
- USD/CAD: 1.3255 - 1.3291 ▲
- EUR/CAD: 1.4688 - 1.4763 ▲
- GBP/CAD: 1.6047 - 1.6119 ▼
- AUD/CAD: 0.8985 - 0.9020 ▲
- NZD/CAD: 0.8504 - 0.8543 ▲