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The Loonie rallies on good news about steel and aluminium tariffs

CAD - Canadian Dollar

The Loonie rallies moderately with all major crosses. The USD/CAD pair falls 0.24 percent following Canadian Foreign Minister Chrystia Freeland’s discussion on the steel and aluminum tariffs Wednesday with Mr. Lighthizer and Senator Chuck Grassley. Ms. Freeland told reporters on Capitol Hill, “The Canadian position remains as it has been from the very outset, that we believe that these tariffs need to be lifted.”

At the same time, Mr. Mnuchin said the US administration is making progress resolving steel and aluminum tariffs that were applied to Canada and Mexico. Those tariffs haven’t been fixed during negotiations over a new trade agreement among the USMCA.

Mr. Mnuchin said, “I think we are close to an understanding with Mexico and Canada,” on resolving the steel and aluminum tariffs. He also mentioned that resolving the tariffs is, “…a very important part of passing USMCA.”

In the meantime, the price of crude oil rebounded as the EIA report showed shrinking stockpiles of American gasoline, implying more demand ahead for oil producers.

Technically speaking, the USD/CAD pair continues to trade within the same range experienced over the last three weeks from 1.3375 to 1.3515. The 1.3400 handle is a significant "psychological level" for buyers of USD/CAD, which might make it bounce in intraday trading.

Key Movers

The GBP/USD pair dropped to a three-month low of 1.2793 this morning, and the EUR/GBP pair is headed for a winning streak, rising over 3 percent or 0.8747 as the risk of a no-deal Brexit increases. The main opposition, the Labour Party, said it wouldn’t back Prime Minister Theresa May’s latest effort to get her withdrawal agreement through Parliament. At the same time, Theresa May faces more leadership challenges from within her party. Technically speaking, 1.2775 and around 1.2750 appear to be good supports for the GBP/USD.

Expected Ranges

USD/CAD: 1.3375 - 1.3450 ▼

EUR/CAD: 1.5003 - 1.5095 ▼

GBP/CAD: 1.7159 - 1.7269 ▼

AUD/CAD: 0.9264 - 0.9300 ▼

NZD/CAD: 0.8787 - 0.8821 ▼