Daily Currency Update

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The Loonie rebounds along with the equity markets

CAD - Canadian Dollar

The USD/CAD pair trades lower this morning, putting a stop to the increase experienced over the last few days. It trades at 1.3282, representing a 0.15 percent fall (stronger Loonie). Weak crude oil has explained the Loonie's weakness of recent days. Crude oil has been slowly trading lower and touched lows in yesterday's trading session, which have not been seen since June and January this year. The reason was a surprise gain in U.S. crude stockpiles, which fueled concerns about a glut amid the increasingly depressing economic view. Crude oil inventories expanded by 2.39 million barrels last week, which broke a seven-week string of declines, according to the EIA. In spite of this, crude oil is suffering the worst part of the trade spat; the global growth outlook is being too extremely priced according to Goldman Sachs.

On the release side, according to Statistics Canada, new housing prices were down 0.1 percent on the national level for the second consecutive month in June. Prices have been flat or falling since last August. The actual being 'less than the 'forecast' is bad for the Loonie. This day might put some marginal pressure on the Loonie's bounce this morning.

Key Movers

The "race of the doves" started weeks ago, and the Philippines cut key rates and hinted at more easing as its economy slows. This followed the easing in New Zealand, Indian and Thai policymakers on Wednesday, which was more aggressive than predicted.

Market participants got some boost after China's central bank fixed the Yuan at a stronger-than-expected level, in an apparent move by China, which wants to prevent panic in the capital markets.

On the economic release side, China's trade balance for July, in Yuan terms, came in much better than expected at CNY +310.26 billion compared with the expected CNY 227.289 billion and the previous CNY 345.180 billion.

Expected Ranges

USD/CAD: 1.3250 - 1.3306 ▼

EUR/CAD: 1.4790 - 1.4927 ▼

GBP/CAD: 1.6019 - 1.6144 ▼

AUD/CAD: 0.9022 - 0.9063 ▲

NZD/CAD: 0.8574 - 0.8620 ▲