Daily Currency Update

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The Loonie weakens amid concerns over external factors

CAD - Canadian Dollar

The USD/CAD pair continues to rise (weaker Loonie) 0.16 percent, trading at 1.3260. Without new economic data in Canada, the Loonie is at the mercy of external factors. It seems like market participants have hit the panic button and are selling risky currencies, piling into safe-haven currencies such as Japanese Yen and Swiss Franc. Furthermore, market participants seem to be rethinking their expectations that Fed interest rate cuts will be able to rescue the economy or that President Donald Trump and Chinese President Xi Jinping can come to a trade agreement. This is obvious when we see the TSX equity index falling for a second day while the BoC continues in a wait and see mode. Market participants fled equity markets for the safety of bonds amid global recession fears and growing risks in Argentina and Hong Kong.

Key Movers

Singapore cut its growth forecast for the year to as little as zero, down from previous projections.

The Argentine peso plunged around 25 percent versus the U.S. dollar, to a record of 60 Argentinian pesos per dollar yesterday, with Argentina´s equity market plunging by the second largest amount of any benchmark in any country since 1950, as market participants did not want to give the benefit of the doubt to Alberto Fernandez, the primary election winner who defeated current president Mauricio Macri. The selloff in Argentinian currency happened despite the winner saying that he does not want to default on the nation’s obligations. Fears of an Argentine default loom as market participants dump Argentinian assets.

Expected Ranges

USD/CAD: 1.3186 - 1.3277 ▼

EUR/CAD: 1.4775 - 1.4923 ▼

GBP/CAD: 1.5950 - 1.6060 ▼

AUD/CAD: 0.8960 - 0.9008 ▲

NZD/CAD: 0.8502 - 0.8580 ▲