Daily Currency Update

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The Loonie rallies along with crude oil and positive housing data.

CAD - Canadian Dollar

The USD/CAD pair falls to a critical support level of 1.3285 after both crude oil jumps 1 percent and the new housing price index came in at 0.1 percent, stronger than the 0 percent expected. According to Statistics Canada, notable increases were observed in the census metropolitan areas of Sherbrooke (+2.1 percent), Montréal (+1.1 percent) and Trois-Rivières (+0.5 percent), with higher construction costs as the primary reason for the rise in all three CMAs. New house prices were up in Kitchener–Cambridge–Waterloo (+1.5 percent) as builders cited favorable market conditions and higher land prices.

Technically speaking, the USD/CAD has a strong support at the 200 moving average of 1.3287, which also coincides with a previous resistance seen in September of 1.3285. It would need to break that level to make the Loonie stronger against the Greenback.

Key Movers

U.K. Prime Minister Boris Johnson and his Irish counterpart Leo Varadkar express hope and the GBP/USD pair jumps on the news. Both agreed there is a, "pathway to a possible deal", " following "detailed and constructive" Brexit talks.

In the U.S. one key item of note from the FOMC minutes is that the FOMC is concerned about low inflation expectations. However, the discussion at the FOMC centered on the downside risks due to trade tensions. There was also divergence on thoughts that the economy is healthy and that there is a need for a cut or two in the Fed rates. The well-known division between the FOMC hawks and doves paints the level of uncertainty. Powell reiterated that while the economy, "faces some risks," overall, it's "in a good place. "

Despite Chinese negotiators not being optimistic about a more comprehensive agreement, China is still open to reaching a partial trade deal with the U.S. as long as no tariffs are added. In exchange, it would offer concessions in non-core areas like agriculture, which could boost purchases of American soybeans to 30 million tons a year. Just a few hours before, noise about blacklists, investment curbs, visa bans, and an angry response to the NBA had been filling the headlines. Trade talks are restarting today. The Japanese Yen and Swiss Franc fell against the dollar, which otherwise has stayed within narrow ranges versus the rest of the G-10 basket.

Expected Ranges

USD/CAD: 1.3200 - 1.3400 ▼

EUR/CAD: 1.4528 - 1.4708 ▼

GBP/CAD: 1.6280 - 1.6500 ▲

AUD/CAD: 0.8890 - 0.9047 ▲

NZD/CAD: 0.8347 - 0.8440 ▲