Bank rates strengthen CAD
Wednesday 9 December, 2020
Daily Currency UpdateIn its last policy meeting before the end of the year, the Bank of Canada said that it would hold its rate steady and continue its quantitative easing plan.
Demand for the Canadian dollar, which was already near a two-year high, remained strong. USDCAD traded at 1.2801 at the time of writing. The rebound in the global and Canadian economies has unfolded largely as the bank had anticipated in its October statement. The bank said that a broad-based decline in the US exchange rate has contributed to a further appreciation of the Canadian dollar.
Key MoversUK Prime minister Boris Johnson was set to have dinner with European Commission President Ursula von der Leyen today to try and find solutions to the remaining issues holding up a post-Brexit trade agreement. The UK government helped the tone after it dropped its clauses within the UK internal market bill. It’s a sign that compromises can be made by Johnson to get the deal over the line. Ahead of the talks we have seen conflicting comments from both the UK and Europe as to whether a deal can be agreed, which has only added to GBP volatility. The pound ranged between 1.3290 - 1.3430 against the US dollar in the past 24 hours and the range against the EUR has been 1.0970 - 1.1070. The top end of these rages will be tested early today, but all will depend on news from Brussels this evening as to whether the pound remains strong into tomorrow.
The Australian dollar drifted back toward 0.74 through trade on Tuesday in what was a largely lackluster session absent of any news outside the current narrative. Ongoing US fiscal stimulus and Brexit negotiations dominated market attentions but offered little to prompt any firm action as both talking points trudge ever so slowly toward an accord. Having touched intraday highs at 0.7435 the AUD trended toward intraday lows at 0.7400 amid a broader negative bias. With little conviction behind the downturn the AUD then bounced between 0.7400 and 0.7420 through the latter half of the overnight session.
- EUR/CAD: 1.544 - 1.553 ▲
- GBP/CAD: 1.708 - 1.721 ▼
- AUD/CAD: 0.949 - 0.956 ▼
- USD/CAD: 1.277 - 1.282 ▲