Daily Currency Update

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Canadian Dollar in holding pattern ahead of tomorrow's inflation data

CAD - Canadian Dollar

The Canadian dollar traded sideways against the US dollar over the past three trading days, and rested near Friday's ten-month high. Canadian dollar participants are looking ahead to tomorrow's inflation data. Consumer Price Index figures will offer further clues on the action the Bank of Canada will take on Canadian interest rates going forward. The Bank of Canada left its benchmark interest rate steady last week at 1.75 percent last week. Crude oil prices fell yesterday after tropical storm Barry failed to impact US Gulf coast production negatively. Today with US trade and Chinese trade negotiators showing signs of talks improving future crude demand is elevating. Looking at the technical side of the USDCAD, support is seen at 1.3029 (.7675), and resistance is at 1.3071 (.7650).

Key Movers

Currency movements overall were reasonably modest on Monday ahead of major central bank policy decisions next week. The U.S. Federal Reverse is expected to cut interest rates at next week’s policy meeting by 25 basis points and make another cut in September. The European Central Bank (ECB) also holds a meeting next week, with investors expecting a dovish statement. Money markets have priced in an ECB rate cut of 10 basis points in September and another one in March. The ECB’s meeting on July 25 may reinforce those expectations.

The British pound fell back towards six-month lows against the Greenback on Monday after a run of weak economic data and continued Brexit concerns. Looking ahead today in the U.K., and we will release their latest employment data. The ILO unemployment rate for the three months to May is expected to remain steady at 3.8%. The number of unemployed people is expected to have decreased to 18.9K in June from 23.2K in the previous month.

Expected Ranges

USD/CAD: 1.3022 -1.3064 ▼

EUR/CAD: 1.4605 -1.4701 ▼

GBP/CAD: 1.6146 - 1.6343 ▼

AUD/CAD: 0.9156 - 0.9191 ▼

NZD/CAD: 0.8690 - 0.8757 ▼

GBP/USD: 1.2397 - 1.2520 ▼