CAD - Canadian Dollar
As COVD-19 cases rise in Canada’s more populous provinces, the impact on the economy was weighed once again by policy makers.
Prime Minister Justin Trudeau and Premier Doug Ford communicated the need for additional sacrifices and will use targeted restrictions to combat a second wave. The Canadian dollar, which had been gaining ground against the US dollar since mid-April, has begun to lose ground.
At the end of August, USDCAD traded at 1.303. Since then, demand for the US dollar has pushed the pair higher and today it traded at 1.339.
The Euro touched an 8-week low, falling through 1.17 while the Pound broke two-month lows following the introduction of new COVID-19 restrictions. Prime Minister Boris Johnson has reinstated curfews on bars and restaurants and encouraged Britons that can work from home to do so. The new round of restrictions is considered the bare minimum in a bid to combat a second wave of infections. The Pound broke below 1.2750 to touch 1.2710 and appears poised to test a break toward 1.25 as we move toward the October Brexit deadline.
The EU’s negotiator Michel Barnier said that he is determined to get a deal done and is currently in London for informal talks. Michael Gove, representing the British government, added to the optimistic feel. He expressed his confidence in the likelihood of a deal and that Brexit can overcome its difficulties to secure a free-trade deal with the EU.
The Australian dollar tracked lower through trade on Tuesday and it was weighed down by a shift in risk sentiment. Hawkish commentary from a Federal Reserve member amplified the impact on markets. Having drifted sideways through the domestic session the AUD was forced below 0.72 US cents touching intraday lows at 0.7155. Investors’ appetites for risk evaporated after Fed member Charles Evans suggested the Fed could raise rates before inflation hit an average rate at 2%. The Fed has led markets to believe interest rates will be flat through the foreseeable future and Evans shift away from that narrative caught investors off guard, prompting a rush to adjust yield expectations. Risk sentiment continued to sour as uncertainty envelops financial markets.
1.558 - 1.563 ▼GBP/CAD:
1.700 - 1.711 ▲AUD/CAD:
0.941 - 0.948 ▲USD/CAD:
1.334 - 1.341 ▼