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The Loonie trades flat amid an unlikely cut in the BoC’s overnight rate announcement this morning

CAD - Canadian Dollar

The Loonie has not moved significantly in overnight trading as we await the BoC rate announcement at 10 am EST. The USD/CAD pair has moved slightly lower (0.10 percent), and it is trading at 1.3319. According to BNY Mellon Markets, the BoC might not move its rate this morning, and few market participants are expecting a change in the overnight rate of 1.75 percent. The most important thing to gather from the BoC announcement today will be signs of that the BoC will take a dovish direction. Since the July meeting, the BoC has been strangely quiet in figuring out monetary policy, and today’s decision will be presented in a statement without a press conference. The Deputy Governor will deliver the Economic Progress Report tomorrow, so we have to be patient and wait one more day to get a clearer view of the BoC's thinking.

It is a busy morning for Canadian releases. According to Statistic Canada, after a strong decline in imports and exports in June, imports rose 1.2 percent in July, while exports fell 0.9 percent. As a result, Canada's merchandise global trade balance went from an essentially balanced position in June (a slight deficit of $55 million) to a $1.1 billion deficit in July. The USD/CAD pair reacted positively with ten pips to the upside towards 1.3329 (weaker Loonie), but then it followed the risk-on mood of the global equity market and the positive price action of crude oil that it is bouncing almost 3 percent this morning. The Loonie won't move significantly until the BoC announcement.

Key Movers

The British Pound is bouncing, and the GBP/USD pair is up 0.85 percent this morning after lawmakers moved to reduce the risk of a disorderly Brexit. Yesterday, it was a volatile day as well when the Pound rallied ahead of the vote. 328 - 301 voted to block a no-deal Brexit. At the same time, Boris Johnson responded by proposing a snap election, but he has been defeated in his first-ever parliamentary vote as Premier. As a consequence, the entire project of Brexit was on the line once again, which helps the British Pound.

According to Bloomberg, U.S. President Trump seems to be trying to reach a trade deal with China before the presidential election in November 2020. Trump suggested through Twitter that negotiations will become trickier if he wins a second term. He tweeted, "Think what happens to China when I win ... deal would get MUCH TOUGHER!"

Expected Ranges

USD/CAD: 1.3243 - 1.3313 ▼

EUR/CAD: 1.4596 - 1.4691 ▼

GBP/CAD: 1.6158 - 1.6282 ▼

AUD/CAD: 0.8994 - 0.9056 ▲

NZD/CAD: 0.8421 - 0.8480 ▼