Daily Currency Update

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The ups and downs of 2020

CAD - Canadian Dollar

Not since the start of 2020 has USDCAD been at levels this low. The pair has hovered around 1.30 since the US Federal Reserve made a historic announcement last Thursday.

USDCAD, at the time of writing, traded at 1.305.

Federal Reserve Chairman Jerome Powell announced that the Federal Reserve would map inflation to a 2% average increase. Periods of too-low inflation would likely be followed by an effort to lift inflation above 2% for some time.

Since the announcement, foreign buyers have seen their US dollar buying power increase each day. The US Dollar Index, a measure of the value of a basket of currencies against the US dollar, hovered around 92.04 this morning.
The news has benefited the Canadian dollar. EURCAD hit a one-month low on the news. And GBPCAD dropped from a one-month high.

Key Movers

EURUSD broke through 1.18 and then upward to 1.19. GBPUSD was up 2.3% and hit 1.33 over the weekend. AUDUSD was up 2.7% and teased 0.74 this morning. A weaker US dollar would allow top American exporters, like those of machinery, fuels, vehicles and other products to sell more goods at lower costs than we’ve seen in the previous months. That could be a boon for the US economy as it continued to manage the spread of COVID-19.

Looking ahead this week, on Tuesday the Reserve Bank of Australia (RBA) will meet. The official cash rate is expected to remain at 0.25% however all attentions will turn to the RBA Rate Statement, which is focused on the outlook. On Wednesday the Australian Bureau of Statistics will release the quarterly Gross Domestic Product (GDP) figures, which is forecast to be down -6.0%. On Thursday we will see the release of the monthly Trade Balance figures. Finally, on Friday we will see the release of the monthly Retail Sales data, the primary gauge of consumer spending. From a technical perspective, the AUD/USD pair is currently trading at 0.7362. We continue to expect support to hold on moves approaching 0.7325, while now any upward push will likely meet resistance around 0.7400.

Expected Ranges

EUR/CAD: 1.554 - 1.560 ▲

GBP/CAD: 1.738 - 1.748 ▼

AUD/CAD: 0.960 - 0.964 ▲

USD/CAD: 1.302 - 1.310 ▲