Daily Currency Update

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The Loonie is still processing the lift on steel and aluminum tariffs by the US

CAD - Canadian Dollar

The USD/CAD pair falls 0.14 percent to 1.3410 this morning (stronger Loonie). The Loonie continues to digest the good news about the US lifting the 25 percent tariffs on steel and aluminum for Canada and Mexico. The next step would be a faster approval of the USMCA by American Congress. On the Canadian side, Canada said it would eliminate retaliatory duties on US products quickly as part of the deal.

US Vice President Mike Pence and Canadian Prime Minister Justin Trudeau will discuss the ratification by the end of this month, although any approvals in Canadian Congress will likely be impacted by the upcoming October election. Chrystia Freeland, Canada's Minister of Foreign Affairs, said she’s still worried about U.S. protectionism, but she also said, "...we have a good, strong conversation happening,” with the U.S. Democrats.

This is a very light week in terms of data releases in Canada with only March retail and wholesale sales to be released tomorrow and Thursday at 8:30 EST. Also, this Wednesday, FOMC meeting minutes will be released in the US, which might have an impact on the Loonie.

Technically speaking, the USD/CAD pair is trading to the downside (stronger Loonie) in the short term. However, it is testing an uptrend support that comes from March. At the same time, there is a support at around the 1.3400 handle, which has been tested this morning, reaching an 11 day new low of 1.3396.

Key Movers

The OECD cut its forecast for the world economy to 3.2 percent from 3.3 percent, insisting that governments resolve their trade disputes (US-China trade war) because they threaten to crimp global growth.

Last night, the RBA accepted the reality of a slowing Australian economy, with substantial weak inflationary pressures consistently below target and stagnant wage growth. RBA's Lowe said that the board would consider the case for a rate cut in June. The AUD/USD dollar and almost all AUD crosses are erasing all the gains seen Monday after Morrison's miracle.

A 2nd referendum was floated in the UK, and market participants are expecting UK Prime Minister Theresa May to unveil a new proposal for getting her Brexit deal through Parliament. The GBP/USD pair bounced 68 pips this morning from 1.2686 to 1.2754 at 7 in the morning EST.

Expected Ranges

USD/CAD: 1.3380 - 1.3432 ▼

EUR/CAD: 1.4935 - 1.4988 ▼

GBP/CAD: 1.6999 - 1.7089 ▼

AUD/CAD: 0.9211 - 0.9272 ▼

NZD/CAD: 0.8703 - 0.8759 ▼