Daily Currency Update

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US payrolls drop for first time since April

CAD - Canadian Dollar

The hits keep coming for the US dollar, and to the Canadian dollar’s advantage. This morning, amidst a surging pandemic, ADP said that private employers cut 123,000 jobs last month. According to the report, private payrolls decreased for the first time since coronavirus lockdowns began in March.

Yesterday, demand for USD fell further. USDCAD fell below 1.27 to 1.266 and in overnight trading to 1.263.

Key Movers

The Great British pound is seemingly flying in the face of the new lockdown, which came into effect last night, as well as the continued rise in virus cases. COVID-19 cases topped 60,000 for the first time on Tuesday, although it is expected that numbers were almost double this before the first lockdown last March. Alarmingly 1 in 50 people in the UK is now thought to be positive, whilst the number is worse for London where it is 1 in 30. Despite this though Sterling managed to claw out gains yesterday against the US Dollar. The Bank of England was under pressure to announce more easing in the face of the expected market slowdown. Net GBP positions amongst investors however remain marginally positive for the time being pointing towards further Sterling appreciation.

The Eurozone’s December PMI’s were slightly downgraded. However, all of December's PMI surveys were conducted before the more contagious virus strain was announced so we could see big differences in the December vs January numbers.

The Australian dollar rallied back through 0.77 last night, pushing through the December 31 high and resistance at 0.7750. Having slipped below 0.7650 in the latter hours of trade on Monday, AUD regained the upper hand late in the domestic session before rallying strongly overnight and in the lead up to yesterday’s open. Having tested resistance at 0.7740/50, AUD surged upward after China’s central bank, the People’s Bank of China, elected to set the official yuan midpoint value at 6.4760, one percent higher than the previous fix and the largest single adjustment since China moved away from a fix peg valuation in 2005. The Australian dollar is often seen as proxy to the yuan, and it certainly benefited from the PBOC’s aggressive correction, advancing to mark fresh highs at 0.7779.

Expected Ranges

EUR/CAD: 1.556 - 1.565 ▲

GBP/CAD: 1.720 - 1.731 ▲

AUD/CAD: 0.981 - 0.989 ▼

USD/CAD: 1.263 - 1.271 ▼