Daily Currency Update

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The Loonie retraces following a stronger Greenback due to fewer bets on US rate cuts

CAD - Canadian Dollar

The USD/CAD pair increases 0.2 percent (weaker Loonie) following fewer bets on deep US rate cuts for the US dollar. At the same time, the North American equity market and gold are falling. The Loonie is plunging despite steady crude oil prices, as demand worries offset Iran's new nuclear threats.

On the release side, according to the Canada Mortgage and Housing Corporation (CMHC), the national trend in housing starts soared in June, primarily due to higher trending row and apartment starts in urban areas. The strong surge in the seasonally adjusted annual rates (SAAR) of apartment starts in April is also contributing to the high level of the trend measure of total housing starts in June. The trend in housing starts was 205,838 units in June 2019, compared to 200,530 units in May 2019. This trend measure is a six-month moving average of the monthly SAAR of housing starts.

Technically speaking, the USD/CAD pair might have an important resistance at 1.3140 and it also has crucial support at around the 1.3100 handle.

Key Movers

Market participants will focus on Fed Chairman Jerome Powell's 2-day testimony to Congress to look for any hints of a rate decrease.

The GBP/USD pair is falling and has broken the psychological level of 1.2500. It is trading at 1.2469 at the time of this writing. The Sterling hovered near a six-month low against the US dollar as market participants continued to bet on lower British interest rates and added to their short positions on the currency. The doubt over Britain's departure from the European Union, as well as over who will become the new British Prime Minister and lead the country out of the bloc, added to the British Pound's weakness.

Expected Ranges

USD/CAD: 1.3100 - 1.3168 ▲

EUR/CAD: 1.4660 - 1.4735 ▲

GBP/CAD: 1.6310 - 1.6400 ▼

AUD/CAD: 0.9066 - 0.9133 ▼

NZD/CAD: 0.8649 - 0.8690 ▼