Daily Currency Update

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The Loonie is still trading within a narrow range as we await more fundamental news, such as the BoC’s monetary policy next week.

CAD - Canadian Dollar

Market participants are waiting for the BoC announcement next week. In the meantime, according to the ADP Canada National Employment Report, employment increased by 46,200 jobs from November to December. The data is derived from actual ADP payroll data.

The USD/CAD pair is still trading within a narrow range, between 1.3030 and 1.3080, despite the excellent market news that came from the U.S. China sign phase one trade deal. President Trump emphasized that this deal has “total and full enforceability.” Some key points that are directly related to the FX market are the following:
• China and the U.S. agreed to refrain from competitive FX devaluation, with the IMF becoming involved if FX issues are unresolved.
• China will communicate regularly and consult on FX markets; at the same time, U.S. and China agree to honour the G-20 FX communique commitments.
• U.S. and China agree to respect one another’s monetary policy autonomy, and U.S-China FX issues are to be referred to as a bilateral arrangement.

Key Movers

The Japanese Yen depreciated to an eight-month low versus the U.S. dollar, despite the Greenback’s weakness. The Japanese Yen is trading above the 110 level, at 110.03 at the time of this writing. The following critical resistance level might be 110.53.

The Chinese offshore Yuan appreciates to 0.26 percent at the time of this writing, and the USD/CNH pair trades at 6.8755 following the signing of the U.S.-China trade deal.

The South African Reserve Bank cut its benchmark interest rate to 6.25 percent from 6.5 percent for the first time since July as inflation is forecasted to stay within the target, and the economy is growing slowly. The South African dollar depreciates 0.21 percent at this moment versus the Greenback.

Expected Ranges

USD/CAD: 1.3038 - 1.3062 ▲

EUR/CAD: 1.4527 - 1.4575 ▼

GBP/CAD: 1.6995 - 1.7042 ▲

AUD/CAD: 0.9000 -0.9036 ▲

NZD/CAD: 0.8650 - 0.8706 ▲