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The Loonie is affected by the U.S.- China trade war this morning

CAD - Canadian Dollar

The USD/CAD pair is rising 0.19 percent, trading at 1.3306 this morning amid a “risk-off” mode in the FX capital markets. The reason, you guessed it, is the U.S - China spat. According to Chinese officials familiar with the talks between the two sides, the most critical hurdle to a breakthrough on trade talks has become President Trump’s credibility. More specifically, President Trump’s comments over the weekend that China had called looking to restart negotiations has been causing some confusion in Beijing, as nobody there seems to have contacted the U.S. negotiators. According to Bloomberg, all the ambiguity has real-world effects for Chinese exporters, with toymakers already losing out on Christmas orders in what should be their busiest quarter. Additionally, in response, governments in the region are following monetary policy moves with a fiscal stimulus of their own.

Technically speaking, the USD/CAD pair is close to touching a critical resistance level that has been respected over the last few days since August 7th. This level lies between 1.3340 and 1.3350. On the downside, 1.3250 and 1.3231 are two key support levels that might hold if the USD/CAD pair falls.

Key Movers

In the U.K., Prime Minister Boris Johnson asked Queen Elizabeth II to suspend the U.K. Parliament from mid-September to mid-October. This move can impede lawmakers’ efforts to block a no-deal Brexit, and it might even trigger a constitutional crisis. The GBP/USD pair is falling 0.6 percent, and the GBP/CAD pair is decreasing 0.40 percent towards 1.2214 and 1.6255 respectively.

Expected Ranges

USD/CAD: 1.3250 - 1.3352 ▲

EUR/CAD: 1.4688 - 1.4752 ▼

GBP/CAD: 1.6159 - 1.6272 ▼

AUD/CAD: 0.8937 - 0.8985 ▼

NZD/CAD: 0.8400 - 0.8466 ▼