CAD - Canadian Dollar
As we’ve seen for the last six months, when stocks are sold off the US dollar is snapped up. Demand for the Canadian dollar was down for the second trading day in a row.
At the time of writing, USDCAD is up nearly three quarters of a percent and stretched to reach 1.32. It opened near 1.30 this morning.
With little of note on today’s macroeconomic docket attentions turn to tomorrow’s interest rate decision from the Bank of Canada (BoC). The bank is widely expected to hold interest rates at 0.25%.
The Great British pound was the day’s big mover. It went lower because of growing concerns a Brexit trade won’t be reached. Reports emerged overnight that Britain plans to enact new legislation to override key components of the Withdrawal Agreement. The move could undermine negotiations to date and derail hopes for a clean break. Prime Minister Boris Johnson suggested that if a deal could not be reached by mid-October then it is unlikely a trade deal will be agreed. He implored all sides to move on and work on contingency plans. Sterling lost almost 1% through the day, tumbling below 1.3250 and 1.32 to touch intraday lows at 1.3140. With uncertainty around Brexit growing and the likelihood of a no deal divorce increasing we expect increased volatility moving into the latter half of Q3 and into Q4.
The Australian dollar offered little to excite investors through trade on Monday. It maintained a 30-point range and bounced between 0.7270 and 0.7300. Having given up highs above 0.74, the AUD struggled as Labor Day ensured volumes remained thin and markets on edge. Investors continued to ignore broader fundamentals instead chasing positive sentiment as a catalyst to drive direction. Despite the correction last week, the Australian dollar continued to mark higher lows and higher highs, suggesting there is still room to the upside. With little of note on the docket this week we expect the AUD will remain contained within recent ranges with a break in sentiment the agent driving a break in either direction.
1.546 - 1.555 ▼GBP/CAD:
1.714 - 1.725 ▲AUD/CAD:
0.952 - 0.956 ▲USD/CAD:
1.308 - 1.319 ▼