Daily Currency Update

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The Loonie falls as the Canadian economy starts to feel the global slowdown.

CAD - Canadian Dollar

The USD/CAD pair trades to the upside at 1.3281 (weaker Loonie), a 0.31 percent increase, amid a strong U.S. dollar. Additionally, more importantly, GDP unexpectedly stalled in July, which could raise concern that Canada isn't unaffected by the broader global slowdown. According to Statistics Canada, GDP was unchanged in July from a 0.2 percent gain in June, which was below expectations. The Loonie was sold off quickly after this news was released at 8:30 am EST earlier today. Furthermore, a drop in oil and gas extraction was the main contributor to the slowdown in GDP, which fell 3 percent in July. This is the most significant monthly decline since 2016.

Technically speaking, the USD/CAD has two significant resistance levels at 1.3304 and 1.3367. On the downside, two key support levels are 1.3242 and 1.3203.

Key Movers

U.S. manufacturing numbers released by the Institute for Supply Management showed the sector contracted to the lowest level in more than ten years in September. As a consequence, the Greenback is erasing most of its gains at the time of this writing. The U.S. dollar index had increased by around 0.3 percent, but it is now up only 0.1 percent at 10:30 am EST.

The Aussie dollar drops to a one-month low after the Reserve Bank of Australia cut rates to a record 0.75 percent and signaled readiness to ease further if necessary. The AUD/USD pair trades at 0.6680 at the time of this writing.

The EUR/USD pair was falling this morning, and it touched an intraday low of 1.0884 after Euro-area inflation came in at 0.9 percent for September, which was slower than analyst expectations and well short of the just under 2 percent rate the ECB aims to achieve for the entire euro area. However, core inflation, excluding food and fuel prices, rose to 1 percent, which is higher than the headline rate for the first time since 2016. There was also disappointing news in the region's manufacturing PMI data, which came in at 45.7 for the month — the lowest reading since the depths of the sovereign crisis.

Expected Ranges

USD/CAD: 1.3252 - 1.3299 ▲

EUR/CAD: 1.4417 - 1.4526 ▲

GBP/CAD: 1.6204 - 1.6354 ▼

AUD/CAD: 0.8822 - 0.8884 ▼

NZD/CAD: 0.8229 - 0.8279 ▼