Daily Currency Update

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The Loonie falls as we await the U.S. trade headlines.

CAD - Canadian Dollar

The Loonie was driven by the price of crude oil, which dropped over 1 percent yesterday on concerns over the U.S. – China trade situation and fears that OPEC won’t renew production cuts when they meet in December. With no economic data to digest, the USD/CAD pair is trading to the upside this morning (weaker Loonie). It is trading at 1.3254, which represents an increase of 0.17 percent since yesterday.

The U.S. trade headlines will remain the central focus. Market participants will also turn to a flurry of Fed speakers ahead of Federal Reserve Jerome Powell’s testimony before Congress on Wednesday and Thursday. The main driver is U.S. President Donald Trump, who is scheduled to discuss the country's trade policy at the Economic Club of New York later today at noon EST. Market participants are likely to hang on to every word. A positive speech on U.S.-China trade would likely satisfy market participants, even without specific details of the "Phase 1" agreement under negotiation. For now, the global equity market, which is bouncing in Europe, Asia and North America, could be positive for the Loonie.

Key Movers

In New Zealand, inflation expectations continue to move away from the target, which removes any flexibility of the RBNZ to wait and see the impact of previous moves. For now, 16 economists in a Bloomberg survey expect the bank to cut the official cash rate by 25 basis points to 0.75 percent tomorrow, 5 see no change.

According to Bloomberg, the Trump administration may delay a decision on whether to put tariffs on European automobiles after an intense lobbying campaign by German car-makers highlighted plans to shift global production to American suppliers. President Trump gave himself a deadline of mid-November. The European Union has threatened to retaliate with tariffs on $39 billion worth of US goods. Trump is expected to extend this week’s deadline again.

Expected Ranges

USD/CAD: 1.3219 - 1.3265 ▲

EUR/CAD: 1.4550 - 1.4655 ▼

GBP/CAD: 1.6944 - 1.7079 ▼

AUD/CAD: 0.9020 - 0.9087 ▼

NZD/CAD: 0.8373 - 0.8420 ▼