CAD - Canadian Dollar
The Loonie increases (the USD/CAD falls 0.05 percent) after a monthly survey of manufacturing for September 2019 came better than expected. The actual number was a decrease of 0.2 percent versus a forecast of -0.5 percent. However, according to Statistics Canada, manufacturing sales fell 0.2 percent in September to $57.4 billion, following a 0.8 percent increase in August. Unfortunately, sales were down in 10 of 21 industries, representing 62.2 percent of the Canadian manufacturing sector. The most impacted industries were petroleum, coal products, and motor vehicle parts. Sales were down in seven provinces in September, led by Alberta. British Colombia reported the most significant increase. Inventory levels declined 0.8 percent to $88.0 billion in September, following two months of gains. Inventories were down in 11 of 21 industries, led by transportation equipment, petroleum and coal product, and wood product industries.
Trump and Treasury Secretary Steven Mnuchin met with Powell at Trump's request to talk about the economy yesterday in the White House. President Trump said he "protested" that U.S. interest rates were too high, but Powell's perspective was consistent with his remarks at his congressional hearings last week. A few minutes after the meeting, Trump tweeted, "... just finished a very good & cordial meeting at the White House with Jay Powell of the Federal Reserve. Everything was discussed including interest rates, negative interest, low inflation, easing, Dollar strength & its effect on manufacturing, trade with China, E.U. & others, etc..." The U.S. dollar moved lower after this meeting during yesterday's trading session.
The Aussie dollar goes higher against the U.S. dollar this morning by 0.3 percent, trading at 0.6827. According to Bloomberg, HSBC Holdings Plc has more than doubled its forecast for Australian property price increases next year as low-interest rates and looser borrowing rules send buyers flooding back into the market. However, the RBA minutes last night were dovish given how seriously a cut was considered at the November 3rd meeting in comparison with the market pricing of just 10-15 percent on the day. According to BNY Mellon, it is increasingly looking like they will ease rates in February, ignoring the improvement in data. Market participants are pricing an 80 percent chance of cuts. The difference with the RBNZ in New Zealand, which surprised the market with a hold last week, is that the RBNZ is pricing a 38 percent chance of cuts for February 2020. That's probably an essential reason for a stronger Kiwi versus the Aussie dollar.
U.K. Prime Minister Boris Johnson and the leader of the opposition, Jeremy Corbyn, are having their first pre-election television debate today. The PM abandoned a tax cut for businesses due in 2020, leaving British companies facing some problems, while Corbyn spent part of Tuesday confirming plans to nationalize parts of industries like water and the railways. The GBP/USD trades flat at 1.2940 this morning, waiting for more clarity.
1.3201 - 1.3237 ▲EUR/CAD:
1.4605 - 1.4671 ▲GBP/CAD:
1.7090 - 1.7161 ▲AUD/CAD:
0.9018 - 0.9043 ▲NZD/CAD:
0.8458 - 0.8497 ▲