Daily Currency Update

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Despite low volatility in the Loonie, it is showing some weakness as we await Friday’s jobs report.

CAD - Canadian Dollar

The Loonie is weakening again this morning, gaining only against the Aussie dollar by 0.03 percent and Japanese Yen by 0.18 percent, but losing against the Euro by 0.26 and the U.S. dollar by 0.1 percent. The Loonie increased initially in the Asian session on a spike in oil prices following retaliatory Iranian missile attacks on U.S.-Iraqi airbases. However, at this moment, crude oil has erased all its gains, and it is falling over 1.5 percent, so the Loonie is weakening. Furthermore, U.S. dollar demand remained supportive of the positive move in the USD/CAD (weaker Loonie); it is trading at 1.3015 at the time of this writing.

The Canadian economic data calendar is empty for day; however, important news will be released in the jobs report on Friday. Also, an important catalyst for the Loonie will be a "fire chat" with BoC Governor Stephen Poloz, who will be holding a press conference at 15:15 EST tomorrow.

Key Movers

The Japanese Yen and Swiss Franc were acting as safe-haven currencies and had gained at the beginning of the Asian session. However, they pared gains following Iran, which said it wasn't seeking war with the U.S.: Iran had fired a series of rockets at two U.S.-Iraqi airbases. Foreign Minister Javad Zarif said the attack was in self-defence. As a consequence, the Yen and Swiss Franc fell in the European session, and at this moment, the Yen has fallen 0.23 percent versus the U.S. dollar.

In Europe, inflation expectations have climbed, boosting bond yields higher. This means that if the trend continues and becomes established, the Euro might be pressured to the upside.

The British Pound (GBP/USD) is having a low volatility session with a 0.68 percent range, a low of 1.3081 and a high of 1.3170. It is trading at 1.3122 at the time of this writing. There are no real catalysts so far, and clearly underlying flow and thin liquidity are driving the move. Furthermore, the European Commission President, Ursula von der Leyen, has warned the U.K. there are "tough talks ahead" in free trade negotiations over the next year. According to Sky News, Ursula von der Leyen said that both sides would have to "prioritise" which elements are negotiated before the end of December 2020.

Expected Ranges

USD/CAD: 1.3006 - 1.3039 ▲

EUR/CAD: 1.4450 - 1.4500 ▼

GBP/CAD: 1.7025 - 1.7100 ▲

AUD/CAD: 0.8905 - 0.8950 ▼

NZD/CAD: 0.8605 - 0.8651 ▼