Daily Currency Update

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Loonie holds steady to dollar for third day

CAD - Canadian Dollar

The Canadian dollar has bounded around 1.356 against the US dollar for a third consecutive day as COVID-19 restrictions ease on both sides of the border.

Nearly all of Ontario has moved to phase 2 of reopening. And while the border is closed to non-essential travel, commerce continues between the two countries. As we reported yesterday, the US auto industry is expected to open shortly and that will be positive news for the Detroit-Windsor corridor.

Tomorrow, a handful of key indicators will be released. Month over month wholesale sales are expected to be more than 10% lower. And the ADP Non-Farm Employment report will likely show a significant decrease in employed.

Key Movers

The pound has remained volatile this week in the lead up to Thursday’s Bank of England meeting. The Bank of England's Monetary Policy Committee, or MPC, is expected to increase current bond buying power by 100bn. The MPC has already used an array of stimulus policy. The UK's interest rate is fixed at 0.1%. It is likely that sterling is currently undervalued and anchored to the downside due to the number of key dates in Britain’s upcoming economic calendar and the number of unresolved, moving parts. To make matters worse, the UK hasn’t seen a positive fundamental data release in a while, most recently unemployment data came in over 100k worse than expected. It seems the pound is holding steady around the $1.26 handle and will likely find a more natural equilibrium once the UK-EU Brexit extension has been granted and the BoE decides what’s best for the UK.

Expected Ranges

USD/CAD: 1.351 - 1.358 ▲

EUR/CAD: 1.519 - 1.529 ▼

GBP/CAD: 1.697 - 1.708 ▼