Daily Currency Update

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CAD just misses 1.27

CAD - Canadian Dollar

Currency markets offered little to excite investors through trade on Monday, with demand for CAD tracking upward through much of the session, having failed to breach resistance on approaches to 1.27. With little of note on the domestic macroeconomic docket attentions remained with the broader risk narrative. Hopes a no-deal Brexit may still be avoided following an extension in negotiations amid signs of compromise, and a boost to expectations surrounding US fiscal stimulus helped drive risk assets higher through the start of the week.

While the underlying risk narrative remains intact, market sentiment was dented in the early hours of the morning following reports London and New York are set to move to tighter lockdowns. America now joins the UK as one of the first countries to approve Pfizer’s COVID-19 vaccine and begin immunizing its citizen’s. With the broader focus on the optimism surrounding such programs the new lockdown restrictions serve as a stark reminder we still have a long way to go before a return to normal and a post pandemic world.

Key Movers

After opening sharply higher yesterday the pound has now pared some of its gains as it awaits developments from Brexit trade talks in Brussels. GBP jumped yesterday as it was confirmed that the UK and EU would "go the extra mile" in a statement from both sides that trade talks would continue despite yet another self-imposed deadline for an agreement not being met.

The UK yesterday confirmed that Greater London and surrounding areas including parts of Hertfordshire and Essex would enter tier 3 Coronavirus restrictions. With case numbers rising in the capital the, its expected to do further economic damage to the UK. The hospitality sector with all restaurants and pubs to close their doors, unless they offer a takeaway service. By acting now, it is hoped the government will not have to change its mind over its plan to relax rules over households mixing over the Christmas period.

Expected Ranges

EUR/CAD: 1.546 - 1.553 ▼

GBP/CAD: 1.695 - 1.7118 ▼

AUD/CAD: 0.958 - 0.964 ▲

USD/CAD: 1.273 - 1.278 ▲