Daily Currency Update

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Attention turns to jobs release

CAD - Canadian Dollar

The Canadian dollar was relatively flat over the last day as expectations mount for tomorrow’s domestic jobs report.

StatCan will release employment change figures and the unemployment rate for July. Forecasters have pinned the unemployment rate at 11.1% and new job creation at 375,000. If the unemployment number is lower than forecast and new job creation higher than forecast, it’s a very positive sign for the Canadian economy.

Across the border, the US will release similar figures. Many (including this commentator) are hopeful that the numbers may indicate a positive economic impact for its citizens.

Key Movers

The dollar index fell back below 93 and stopped short of a break below 92.50, nearing last week’s two year low. The euro and Great British ound both advanced through trade on Wednesday, largely on the back of US dollar weakness. The single currency moved back above 1.1850 to test a break above 1.19 while the pound jumped through 1.31 to touch intraday highs at 1.3160.

The Australian dollar continued to test new highs through trade on Wednesday, pushing back through 0.72 amid hopes a COVID-19 vaccine will be available sooner than first estimated. Having struggled to break above 0.7180 through the domestic session the Australian dollar found support overnight, surging to intraday highs at 0.7251 before profit taking overwhelmed the upturn and the currency corrected lower into this morning’s open. Risk demand was boosted by reports Novavax stage one trials had induced a positive antibody response, while new treatment methods in the US have seen a reduction in mortality rates by up to 50%. Hopes for a cure and a strong round of corporate earnings results, coupled with expectations US lawmakers will reach an agreement on Fiscal Stimulus by the end of the week helped fuel the risk on mood and underpinned the Australian dollar upturn.

The Bank of England released its interest rate decision this morning. The bank expects UK GDP to return to Q4 2019 levels by the end of 2021 with household spending leading the way before business spending catches up. The pound is currently riding a wave of US dollar weakness.

Expected Ranges

USD/CAD: 1.325 - 1.332 ▼

GBP/CAD: 1.739 - 1.751 ▼

EUR/CAD: 1.572 - 1.578 ▼

CAD/AUD: 1.040 - 1.048 ▼