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Canadian dollar loses ground

CAD - Canadian Dollar

After hitting a one-year low on November 9, USDCAD has climbed out of 1.29 and crossed over to 1.31 this morning.

Low demand for the USD pushed the pair lower, and therefore provided CAD with more buying power. With the US bank holiday, equity markets took a brief pause, and as the CAD has become tied to stock markets, the USDCAD may have recalibrated.

Key Movers

Yesterday Sterling dipped lower as rumors of another extension to the on-going Brexit negotiations swirled. The mid-November deadline looks set to be extended as the two sides are yet to come to a formal agreement on Britain’s exit from the EU. GBP/USD bounced off the 1.33 handle and is now sub 1.32 whereas GBP/EUR tempted to test 1.13 however is now back below 1.12. This morning UK gross domestic product grew by a quarterly record for the months July-September, growing by 15.5%. However, this missed the forecast of 15.8% and certainly doesn’t to cover the crash of over 20% in the 3 months prior. In a further blow for Prime Minister Boris Johnson, Director of Communications Lee Cain resigned yesterday. This suggests there is a lot of tension in the UK government right now, particularly over Brexit and how leaders are dealing with COVID-19.

The overnight session saw the Australian dollar fall slightly against the USD despite upbeat global equity markets. Having initially soared to 0.7318 in the afternoon, the AUD has fallen back below the key 0.7300 handle. The New Zealand dollar was one of the best performers on the day yesterday, ultimately forcing the AUDNZD cross lower to 1.0572, representing a 4-month low. Looking to the day ahead, we will get domestic inflation expectations from the Melbourne institute before focus shifts offshore. In New Zealand, we will get net migration data which will obviously remain subdued due to the lockdowns, Industrial production data out of the Eurozone, UK trade balance and GDP data and finally US October CPI is due.

Expected Ranges

EUR/CAD: 1.536 - 1.550 ▼

GBP/CAD: 1.719 - 1.728 ▲

AUD/CAD: 0.948 - 0.953 ▲

USD/CAD: 1.305 - 1.314 ▲