Daily Currency Update

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Eight-month high mark set

CAD - Canadian Dollar

The US dollar hit an eight-month low with the Canadian dollar, reaching values not seen since before the COVID-19 lockdowns began in April.

USD/CAD reached 1.317 yesterday morning. Its only climbed slightly upward since then and is currently trading at 1.321. The pair’s one-year low was 1.296 at the start of the New Year.

Several factors have contributed to the decline in the currency pair’s value. The US economic outlook may be slightly improving, and with it, traders are willing to make more purchases and more investments outside of the US. Coupled with Canadian Prime Minister Justin Trudeau's spending plan, the Canadian dollar has opened higher four weeks in row.

Key Movers

The Euro and Great British Pound also saw some movement with both being on the receiving end of some profit-taking. The Sterling fell around 1% to open this morning at 1.3109 and the Euro moved back down to 1.850.

British inflation jumped unexpectedly last month to its highest since March, as clothes shops did not hold their usual summer sales when they reopened after the coronavirus lockdown. Most economists expect it to fall again soon. Annual consumer price inflation rose to 1.0% in July from 0.6% in June. The news helped the pound hold its gains against the dollar but saw some profit taking after the FOMC minutes release.

The Australian Dollar surged to an eight-month high yesterday topping 0.7275 on the charts vs the Greenback fueled by a combination of factors including increased demand for risky assets and accelerating commodity prices especially in iron ore and gold. Unfortunately, the move was short-lived and lost all ground in the late hours of the North American session as Gold prices dropped 3%. The Westpac-Melbourne Institute Leading Index, designed to predict the direction of the economy, was released yesterday. Recent figures show the growth rate still to be in negative territory rising to -4.37 percent in July from -4.43 percent in June.

Expected Ranges

EUR/CAD: 1.562 - 1.567 ▲

GBP/CAD: 1.728 - 1.737 ▼

AUD/CAD: 0.944 - 0.953 ▲

USD/CAD: 1.315 - 1.323 ▲