Daily Currency Update

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It’s a hat trick for the Loonie

CAD - Canadian Dollar

The Canadian dollar opened the week 1.3% up in value against the US dollar and it was the third Monday in a row USD/CAD opened lower than the previous week.

As COVID-19 restrictions eased, the Canadian economy improved. According to the Canadian Real Estate Association, home sales increased 26% in July from the previous month and home prices increased 2.3%.

However, foreign investors reduced their Canadian holdings by CAD $13.5 billion in June. According to StatCan, it was the first time in five months that the outflow was greater than the inflow of capital into Canada. Foreign investors must purchase local currency to purchase Canadian securities.

USD/CAD opened session this morning hit 1.32 before a slight uptick.

Key Movers

Looking ahead to this week, the UK and the European Union start their sixth round of trade talks in Brussels tomorrow. The talks are set to last until the end of the week. Irish Prime Minister Michael Martin stated last week that a post-Brexit deal can be struck after talks with his UK counterpart. He also said that a failure to reach an agreement would harm economies across Europe and UK in the wake of the coronavirus crisis. Hopefully these comments ring true and further positive rhetoric comes out of this week’s talks. If so, sterling could gain back more ground against the US dollar.

Concerns over a second wave of COVID-19 in Europe saw European equity markets retreat nearly 2% on Friday and lead to the UK introducing further quarantine measures on holiday makers returning from Europe. All eyes will now be on European PMI and consumer confidence data due on Friday.

Expected Ranges

EUR/CAD: 1.566 - 1.572 ▲

GBP/CAD: 1.728 - 1.737 ▲

AUD/CAD: 1.048 - 1.053 ▲

USD/CAD: 1.32 - 1.326 ▲