Daily Currency Update

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Déjà vu. Vaccine news.

CAD - Canadian Dollar

Vaccine maker Moderna announced this morning that its COVID-19 vaccine was 94.5% effective, and like we saw last week, markets climbed higher when Pfizer made a similar claim.

As we’ve seen, market enthusiasm and a willingness to invest in riskier assets has pushed demand for the US dollar down against Canadian dollar. USDCAD traded at 1.306 at the time of writing.

In market fundamental news, manufacturing sales rose 1.5% to $53.8 billion in September, following a 1.4% decrease in August. Sales increased in 13 of 21 manufacturing industries led by the wood, chemical and food industries. Nevertheless, sales in September were 3.6% below their pre-pandemic levels in February.

Key Movers

European Central Bank President, Christine Lagarde spoke on the likely recovery of the Eurozone as “unsteady” and “stop and start”, following the distribution of the vaccine. With greater clarity in global markets, it is likely the ECB will announce further easing measures on December 10, with either a further package, quantitative easing, or least likely, a rate cut. This week we see an abundance of Eurozone data.

The pound was given a lift on Friday afternoon as news broke that Dominic Cummings, Chief Adviser to Boris Johnson, had left Downing Street with immediate effect. Cummings was a key architect in the Brexit saga. Reports suggest his absence will not slow down the negotiations. Some analysts predict a deal may be reached in the next 10 days, while others suggest the UK may seek further extension due to COVID and the desire to not disrupt vaccine distribution.

The Australian dollar had an excellent run early last week touching highs of 0.7339 on the back of the euphoria surrounding the encouraging progress in the Pfizer vaccine. Without any macroeconomic news for markets to focus on, the AUDUSD moved within a 20-pip range (0.7220 – 0.7240). As trading continued offshore, a rise in sentiment pushed the Aussie to highs of 0.7273 and finally closing the week at 0.7264. The AUDUSD opened this morning at 0.7264, and AUD is deemed to have moved into a consolidation phase.

Expected Ranges

EUR/CAD: 1.546 - 1.556 ▲

GBP/CAD: 1.722 - 1.735 ▲

AUD/CAD: 0.953 - 0.957 ▼

USD/CAD: 1.306 - 1.314 ▲