Daily Currency Update

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The Loonie trades strongly after better than expected GDP numbers

CAD - Canadian Dollar

The USD/CAD pair trades lower (stronger Loonie), touching an intraday low of 1.3248, which represents a fall of 0.22 percent. However, technically speaking, it is trading at an important support level, which infers a likely bounce in intraday trading. The reason for the Loonie’s appreciation is the economic release from Statistics Canada, which noted that the economy expanded at an annualized pace of 3.7 percent in the three months up to June, which was better than the expectation of 3 percent. This was only a 0.5 percent increase from the first quarter. On the flip side, crude oil was falling over 1 percent this morning, but it has managed to bounce, making the Loonie stronger than the Euro, U.S. dollar, British Pound, and Aussie dollar by 0.4, 0.2, and 0.2 percent respectively.

Regarding the U.S.-China trade spat, China's Minister of Commerce Gao said China wouldn't retaliate against Trump's latest tariffs and confirmed that China and the U.S. are in contact. Trump followed by saying a talk was scheduled for today and that it would be at "a different level," insinuating a better dialogue would take place.

Key Movers

In Europe, the Head of the Dutch Central Banker, Klaas Knot, lowered market expectations for a significant stimulus package at the next ECB meeting. He said the European economy, “doesn't yet warrant the resumption of quantitative easing.” He added that Q.E. should not resume unless the current slowdown worsens. The EUR/USD pair spiked on his comments. However, the incoming ECB President Christine Lagarde signaled that she would “follow Mario Draghi in keeping monetary policy ultra-loose.”

In New Zealand, the NZD/USD pair fell towards 0.6289, despite data showing that New Zealand consumer confidence rose in August. Furthermore, July building permits came in at 1.3 percent month to month, which was better than the previous -4 percent. At the time of this writing, the NZD/USD is trading at 0.6311, and it looks ready to continue bouncing during the North American session. Finally, Australia is on track to run its first current-account surplus since 1975. However, the cash rate is at a record low of 1 percent and forecast to drop to 0.5 percent next year..

Expected Ranges

USD/CAD: 1.3250 - 1.3315 ▼

EUR/CAD: 1.4610 - 1.4657 ▼

GBP/CAD: 1.6110 - 1.6232 ▼

AUD/CAD: 0.8923 - 0.8962 ▼

NZD/CAD: 0.8348 - 0.8411 ▼