Daily Currency Update

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Canadian dollar continues to climb

CAD - Canadian Dollar

The Canadian dollar reached a five-week high against the US dollar yesterday and it continued to climb upward in this morning’s trading. The Loonie reached 1.337 this morning, its highest value since June 7.

The positive swing was triggered after the European Union finalized a recovery fund and traders shifted toward the Europe. The EU’s proactive and aggressive fiscal stimulus measures are expected to guide the area out of the coronavirus pandemic faster than their US counterparts as Congress continues to battle partisan objectives, delaying much needed fiscal support.

Key Movers

The Dollar index fell another two tenths of a percent on Wednesday, marking its lowest level since March. As real interest rates continue to fall demand for the USD as high yield play is also diminishing adding increased downward pressure.

The Great British pound lost ground following reports the UK had abandoned hopes of securing a Free Trade Deal with the US before years end, while fears the Brexit Transition period will end without a deal grow. Having left the common market the UK is excluded from the EU Recovery Fund plans, funds that would be warmly welcomed as Britain’s debt continues to mount. Having slipped below 1.27 the GBP touched intraday lows at 1.2650 and is likely to remain under pressure as its economic future remains clouded.

The AUD held onto recent gains, marking fresh highs overnight as risk aversion continues to ease and investors spur commodity and growth led currencies higher. Despite an uptick in new COVID19 cases in Victoria, alarming GDP forecasts and increased US/China trade tensions the AUD crept nearer 1.41 as a sustained risk on mood continues to steer direction. Having touched intraday highs at 1.409 the AUD edged lower into this morning’s open slipping back below 1.396.

Expected Ranges

USD/CAD: 1.337 - 1.342 ▲

GBP/CAD: 1.698 - 1.709 ▼

EUR/CAD: 1.548 - 1.553 ▼

CAD/AUD: 1.042 - 1.049 ▲