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Easing Trade War Worries Heighten the Canadian Dollar's Short Term Outlook

CAD - Canadian Dollar

The Canadian dollar traded stronger against its US counterpart yesterday, the lift provided to the loonie was due to comments from President Trump. Trump commented that a primary deal with China would be signed early in 2020. China's trade ministers also committed that tariffs on products from pork to semiconductors will be lowered. An agreement between the world's two most significant trading part has market participants lifting the loonie due to the potential rise in demand for Canadian resources and commodities. Crude oil, specifically West Texas Intermediate, is up 0.35% to 60.73 dollars per barrel. Looking at the technicals resistance for the USDCAD pair is seen at 1.3172 and support is being eyed at 1.3145. The Canadian dollar should trade well within this range today, heading into Christmas Day tomorrow and Boxing Day Thursday coupled with today's holiday shorted trading session and lack of market fundamentals.
Today marks the last OFX Daily commentary of 2019, and we are signing off for 2019 until January 6th, 2020. The Daily Commentary Team, and on behalf of all of us here at OFX, we wish everyone a safe and happy holiday season.

Key Movers

Yesterday's UK Retail sales figures for November came in well under expectation at -0.6% to add further pressure to a struggling pound. Yesterday also saw the final Bank of England meeting of the year, which produced a 7-2 vote in favor of keeping interest rates on hold at 0.75%. Sterling dropped roughly half a percent against the USD and EUR after the announcement.
Today MPs will vote on whether to back prime minister Boris Johnson's plan for the UK to leave the EU on January 31st. The withdrawal agreement bill would also include a clause banning the government from extending the transition period beyond December 2020, something that has reignited concerns around a hard Brexit and has subsequently served to weaken sterling over this week.
With the Conservatives having won an 80-seat majority at last week's general election, the bill is likely to be met with little resistance and be passed, before it faces legal scrutiny in the house of Lords. Sterling has fallen just over two and a half percent against the Euro (1.1710) and US Dollar (1.3020), and over 3% against AUD (1.8890) since the start of this week, and we could well see further downward pressure on the pound upon approval of the bill in the commons today.

Expected Ranges

USD/CAD: 1.3137 - 1.3168 ▼

EUR/CAD: 1.4565 - 1.4598 ▼

GBP/CAD: 1.6995 - 1.7059 ▲

AUD/CAD: 0.9084 - 0.9119 ▼

NZD/CAD: 0.8702 - 0.8746 ▼