Daily Currency Update

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Wholesalers up nearly 1%

CAD - Canadian Dollar

Canadian wholesale sales grew 0.9% to $66.2 billion in September and remained higher than February's pre-COVID-19 level for the third straight month.

StatCan released the data this morning and it came in higher than forecasted. Wholesale sales are a leading indicator of consumer spending, as retailers generally order more from wholesalers when they expect consumer sales to increase.

Demand for the CAD has fluctuated and has been generally higher than its USD pair. As such, USDCAD hit 1.31 and has fallen back toward 1.309. The data provided CAD a slight bump against the EUR and the GBP.

Key Movers

Both the euro and the Great British pound offered little to excite investors as Brexit talks fail to yield any concrete evidence an agreement will be reached. UK and EU officials have entered the final week of negotiations and while a deal is possible a gap in expectations on key sticking points, namely fishing rights, threatens to derail an 11th hour trade agreement. The euro bounced between 1.1815 and 1.1865.

Sterling broke back below 1.32, trading between 1.3240 and 1.3170. We anticipate a trade agreement will be struck before the end of the month, affording a boost to both the GBP and EUR, however failure to reach a compromise opens the door to a sharp and swift correction. Worryingly for the EUR the EU’s shared COVID-19 rescue plan appears vulnerable as peripheral countries block the EU budget and distribution of funds. Any hiccup or delay in the delivery of the program will hurt the shared currency.

The AUD outperformed most major counterparts advancing against the JPY, CHF, Euro, GBP and CAD to start the week as markets continue to largely look past increasing COVID numbers in the US and Europe. While we have seen several wobbles in market sentiment amid overwhelming coronavirus infections investors have remained largely resilient and immune to the short-term headwinds. The focus remains on the longer-term outlook as vaccines make is possible to return to an open global economy. We are watching resistance at 0.7325 with a break above this handle opening the door for a push toward September highs at 0.74.

Expected Ranges

EUR/CAD: 1.547 - 1.558 ▲

GBP/CAD: 1.724 - 1.738 ▲

AUD/CAD: 0.955 - 0.958 ▼

USD/CAD: 1.306 - 1.310 ▲