Daily Currency Update

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Canadian dollar steadies with markets

CAD - Canadian Dollar

Markets were relatively flat and demand for the Canadian dollar fluctuated overnight between a tight range.

USDCAD reached a high of 1.315 and a low of 1.311.

For the last 8 months, the markets have been driven by COVID-19 caseloads. Yesterday, the US recorded its second highest one-day total of new cases. With 10 days to go to the 2020 US Presidential election, COVID-19 may not control markets.
Markets weren’t impressed by the latest “talks” for a stimulus package to the US economy. OFX Daily Commentary has talked about it since September. Speaker Nancy Pelosi said the bill may be here before the election.

Key Movers

European Union’s chief Brexit negotiator Michel Barnier renewed Brexit negotiations on Wednesday and this caused the pound to jump against several currencies. This headline has since faded, and the pound has lost some of the ground it made against the EUR and USD as markets await to hear if a deal is progressing. Intensive negotiations are due to resume today as Barnier meets with Britain’s Chief negotiator David Frost with the hardest issue due to be tackled - fisheries. GBPUSD has dropped from 1.3170 down to 1.3060 and GBPEUR has dipped to 1.1060.

UK retail sales manufacturing and services PMI were released this morning, but sterling movement was be dominated by the latest news on Brexit negotiations. The pound will rise if a deal looks likely and fall if not, so worth keeping an eye out today.

Thursday’s session saw the Australian dollar rise from 0.7085 to 0.7125, as markets adopted a positive mood. Although there was no progress made on the US fiscal stimulus package, the Australian dollar was aided by positive risk sentiment with the S&P500 rising 0.5% and positive US economic data was digested by markets. The New Zealand dollar benefited more than the Australian dollar, pushing the AUD/NZD cross down below 1.0650, its lowest level since July.

Expected Ranges

EUR/CAD: 1.550 - 1.556 ▼

GBP/CAD: 1.712 - 1.720 ▲

AUD/CAD: 0.933 - 0.928 ▲

USD/CAD: 1.311 - 1.315 ▼