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Summer is officially over for the Loonie, amid crude oil weakness

CAD - Canadian Dollar

The USD/CAD pair rises 0.35 percent (weaker Loonie) as crude oil prices plunge 3 percent this morning. The reason for weakness in crude oil is consistent with the broader risk-off mood around the globe. On top of that, Bloomberg reported that OPEC members increased their crude oil production for the first time this year in August, generating doubts over the OPEC's self-imposed production restraints. Hurricane Dorain, which briefly threated the Gulf of Mexico, is set to turn north, hitting the northeast coast of Florida, along with Georgia and South Carolina, according to the National Hurricane Center.

Technically speaking, the USD/CAD pair broke the 1.3350 level this morning, a significant resistance level. In intraday trading, it also reached the next resistance level of 1.3370 a few minutes ago. If the USD/CAD pair falls back and breaks 1.3340, it might drop if the global equity market mood and crude oil prices improve. However if crude oil and the global equity mood deteriorate, the next resistance level for today and tomorrow is expected around 1.3397 and then 1.3418.

Key Movers

The British Pound broke the 1.2000 handle, which is a psychological level. However, at the time of this writing, it has managed to bounce above it, and it is trading at 1.2023. This is a new three-year high, following the 1.1905 level previously reached on October 7, 2016. Opposition lawmakers started a move to force Prime Minister Boris John to leave his plans of taking the U.K. out of the European Union behind at all costs on October 31st.

According to the Wall Street Journal, the escalating trade war between the U.S. and China is affecting the global economy, hitting industries in Asia including Japan and South Korea, as well as Germany in Europe. Global industrial production fell for three months until June, as did trade flows, and a series of surveys of manufacturing companies from Asia and Europe, which suggests a rebound is unlikely over the coming months.

The Chinese Yuan dropped to its weakest level against the U.S. dollar in 11 years at around 6:30 pm EST yesterday, extending a slide that started days after President Trump said he would impose tariffs on almost all Chinese imports.

Expected Ranges

USD/CAD: 1.3338 - 1.3397 ▲

EUR/CAD: 1.4611 - 1.4646 ▲

GBP/CAD: 1.6012 - 1.6156 ▲

AUD/CAD: 0.8994 - 0.9055 ▲

NZD/CAD: 0.8403 - 0.8439 ▲