Daily Currency Update

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Fed cuts rates with further cuts for 2019 unclear

CAD - Canadian Dollar

The Canadian Dollar has recouped yesterdays move lower against the US dollar after the Fed elected to issue a 25-basis point cut to interest rates, a move widely anticipated and priced in by most analysts. In the wake of the cut, markets shifted focus to Fed Chairman Powell’s statement as a new marker for direction. Powell stressed the US outlook remained solid, indicating moderate interest rate adjustments would be all that was needed to keep the economy on track. These comments left markets wanting and were considered hawkish when compared with expectations, allowing the USD to rally across the board, and sending the CAD toward intraday lows at 0.7500 cents US.
Markets had expected the Fed would deliver another cut before years end, however, the dot plot of projections suggest the committee is divided with median outlooks consistent with a policy of neutrality through the next three months, that is no additional rate cuts before 2020.
With the Fed policy decision behind us, our attentions turn to domestic data coming Friday, with Canadian Retail Sales Figures from the month of July released at 8:30 am.

Key Movers

It was a rough night for the antipodean currencies last night, the Australian Dollar and New Zealand dollar. First off the Kiwi weakened as its economy slowed to its lowest level in five years with manufacturing and exports both falling due to the slowdown in China, its largest export partner. It was a similar theme for the Aussie dollar as it dropped to two week lows against the US Dollar with unemployment levels ticking up. This is alarming for the Reserve Bank of Australia who earlier in the week said they'd expect employment growth to be mild.

Expected Ranges

CAD/USD: 1.3256 - 1.3309 ▼

EUR/CAD: 1.4656 -1.4709 ▲

GBP/CAD: 1.6519 - 1.6602 ▼

AUD/CAD: 0.9003 - 0.9085 ▼

NZD/CAD: 0.8359 - 0.8420 ▼

EUR/USD: 1.1022 - 1.1074 ▲